HDFC Securities' research report on Marico
Marico delivered a mixed bag with beat in revenue growth and miss on gross margins. Net revenues grew by 15% (exp of 13%) with volume growth of 6% (exp. 6%). The co. benefited from softening of copra prices (-23% YoY, -12% QoQ) but wasn't able to expand GM owing to volatile prices of other commodities. Marico's GM pressure was the least in 3Q vs. HUL, Dabur and Emami. EBITDA/APAT grew by 16/12% (exp 23/20%).
Outlook
The company will enjoy an earnings upcycle resulting in sustaining rich valuations. We value Marico based on P/E of 35x Dec-20 with TP of Rs 394. Maintain BUY.
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Read More First Published on Feb 14, 2019 03:45 pm
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