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Marico 4QFY2014 performance highlights and results update

May 15, 2014, Thursday, 05:55 GMT | 01:55 EST | 10:25 IST | 12:55 SGT
Contributed by Angel Broking


For 4QFY2014, Marico posted a strong 75.2% yoy growth in its consolidated net profit to Rs.89cr, aided by recovery in both, its India and international businesses.

Key highlights of the quarter: Marico’s consolidated top-line rose by 7.3% yoy to Rs.1,069cr. Adjusted for the now demerged Kaya business, the top-line growth stood at 17.4%. The company’s India FMCG business grew by 16%, aided by a 6% volume growth and price hikes taken by the company across its portfolio. The company’s international businesses posted a revenue growth of 21% during the quarter with a constant currency growth of 8% yoy. Despite a 530bp yoy decline in gross margins due to the steep increase in copra prices, the company’s OPM increased by 228bp yoy to 14.2% due to reduction in advertisement and other expenses. The company’s bottom-line increased by 75.2% yoy to Rs.89cr, due to a 27.8% yoy increase in operating profit, higher other income and lower interest costs.

Outlook and valuation: Going ahead, we expect Marico to post a healthy growth in its domestic business, aided by its strong brands. The recent acquisitions made by the company too are expected to fuel growth in the future. At the current market price, the stock is trading at 22.4x FY2016E EPS. We recommend an Accumulate rating on the stock with a target price of Rs.254.

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