Marico Industries, the edible oil major, continues to display strength in financial performance. In June quarter the company has recorded a strong 19% growth in topline and 16% growth in net profit on a consolidated basis. The consolidated numbers include the performance of its 100% Bangladesh subsidiary.
Operating Profit (EBDIT)
Operating Profit Margin (%)
Profit before Tax
Profit after Tax/(Loss)
Net profit margin (%)
No. of Shares
Diluted Earnings per share*
The strong growth in topline numbers has come about due to a hike in MRP prices, post strengthening of commodity prices. Marico actually saw an overall volume growth of 9% YoY during the quarter. The company expanded its operating margins by 40 basis points. Excluding deferred taxes in both comparative quarters, it would have finished 1QFY03 with an 18% net profit growth.
The Bangladesh picture...
Marico Industries (excluding Bangladesh) reported an 18% growth in topline and 12% bottomline growth during June quarter. Here too, deferred tax deflated net profit growth. However, it is clear the the Bangladesh operations of the company are picking up and this helped the company report improved overall performance.
Marico continues to be a zero debt company (i.e. it doesn't have interest bearing debt). The company improved its overall market share in almost all categories. Only in 'Sil' jams the company seems to have given away market share. The company's hair oil business continued to grow. Over the years, Marico has reduced its dependence on the 'Parachute' brand from around 70% a few years back to around 40% of turnover currently. New product share in turnover is up from 11% in 1QFY02 to 15% during 1QFY03. The company has successfully managed to fight off FMCG major, HLL's challenge and has infact consolidated its position.
Market Share %
Current Market Rank
Parachute & Oil of Malabar
Saffola & Sweekar
Refined Oils in Consumer Packs
Total Hair Oils
Hair & Care
Non-Sticky Hair Oils
Value Added Coconut Oils
Amla Hair Oils
Source: ORG urban Retail Market Research and company release
At Rs 317 the stock is trading at 8.5x annualised 1QFY03 earnings. The management has cautioned that topline growth may not be as strong as in 1QFY03, as MRP price hike effect may wane going forward. However, seeing the company's grit in holding its own in a difficult environment, the valuations look good.
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