Marico Q1 Review - Multiple Growth Drivers In Place: Systematix
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Systematix Research Report
Marico Ltd.’s Q1 FY22 topline was ahead of our estimates while margins were slightly below our estimates.
Domestic revenues grew 35% YoY driven by volume growth of 21% YoY on a favourable base of down 14% YoY.
Gross margin contraction was higher than our estimates due to raw material inflation, resulting in Ebitda margin of 19% (versus our estimate of 19.5%).
We believe Marico is entering its strongest business phase given:
Parachute coconut oil’s market leadership and brand equity is enabling sustainable growth,
value added hair oil is witnessing a revival in growth rates aided by focus on the bottom-of-the-pyramid and higher rural distribution,
Saffola edible oil should continue its strong growth momentum led by an increase in household penetration.
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