Marico Q4 Review - Volume Momentum, Price Increases To Sustain Sales Growth: Motilal Oswal
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Motilal Oswal Report
Marico Ltd.’s reported Ebitda and profit before tax were in line with our estimates, although sales surprised, diverging from our forecasts.
However, margins disappointed, weighed by material cost pressures.
The company is likely to report higher sales growth in FY22E versus our earlier estimates, despite the impact of some temporary supply chain disruptions, owing to-
- 90% of its portfolio being non-discretionary,
- healthy volume growth sustaining despite steep price increases (particularly in Saffola) – in response to higher commodity costs, and
- higher realizations.
The Food business (approximately 4% of sales in FY21; up 135% YoY) is expected to add 100– 120 basis points of delta to sales annually.
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