Marico Q1 Review - Rich Valuations Warrants Caution: Prabhudas Lilladher
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Prabhudas Lilladher Report
We are increasing FY22/23 earnings per share by 7.2%/3.8% on the back of high sequential growth in margins as input cost inflation has peaked out.
We believe Marico Ltd.'s outlook remains positive going forward given:
strategy to push volumes working in high inflationary environment in parachute and value added hair oil,
improved competitive positioning of Saffola ,
foods on track to achieve Rs 5 billion revenue in FY22 and Rs 8.5 billion by FY23,
go-to-markets expansion through chemist channel in urban and direct reach in rural by 25% increase in stockists in next two years, and
focus on digital brands to provide Rs 4.5-5 billion topline by FY24.
Marico's near term pressure to sustain as surge in Covid-19 cases in Bangladesh and Vietnam to impact international business revenues.
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