Marico - Working Capital Improvement May Accelerate Value Creation: ICICI Securities
A worker organises bottles of Marico Ltd. coconut hair oil products at a department store. (Photographer: Prashanth Vishwanathan/Bloomberg News) 

Marico - Working Capital Improvement May Accelerate Value Creation: ICICI Securities

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

While Indian fast moving consumer goods' value-creation story over 2010-2020 has been primarily driven by good earnings growth, we note instances (Emami Ltd. and GlaxoSmithKline Consumer Healthcare Ltd.) where accelerated value-creation was driven by working capital improvement (and hence higher operating cash flow/free cash flow).

In this report, we highlight the Marico Ltd. story – it improved working capital by 30 days to 17 days in FY21 driven by:

  1. stock keeping unit rationalisation,
  2. new manufacturing footprint and automated systems,
  3. lower receivables and
  4. stricter credit control in general trade.

Click on the attachment to read the full report:

ICICI Securities Marico Company Update.pdf

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