Marico Q3 Results Review - Profitability To Remain Elevated; Maintain 'Accumulate': Dolat Capital

Dolat Capital Report

Marico Ltd.’s revenue and Ebitda were in line, adjusted profit after tax was ahead our estimate. The company reported 1.9% YoY revenue de-growth. Domestic business reported 8.4% de-growth with 2% volume increase. 

Marico's gross margin expanded by 630 basis points YoY to 51.3%. Copra price moderation and lower price pass on helped expand margins.

Parachute rigids volume grew by 3% (2% volume growth in base quarter) led by loose to branded conversions picking up. On a four-year compound annual growth rate basis volume grew by 3%.

We have increased our FY24E earnings per share estimates by 2.7% at Rs 11.8 to factor in Q3 performance but maintained FY25/26E EPS at Rs 12.7/14.0.

Valuing the stock at 42 times FY26E EPS, we have arrived at a target price 586. Maintain 'Accumulate'.

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