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Marico: Higher OPM drives bottomline growth - Views on News from Equitymaster
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  • Jul 26, 2000

    Marico: Higher OPM drives bottomline growth

    Marico Industries has reported a YoY 95% jump in the net profits to Rs 118 m on total revenues of Rs 1.5 bn in 1QFY01. The high growth rate in the profits is mainly due to improvement in profit margins to 11% (from 6.4% in 1QFY00).

    The company had experienced de-growth in profits in the first two quarters of FY00. As a result on a YoY basis the growth rate is higher. However with the concerted management efforts the company has recorded growth in profits in the second half of FY00. The high rate of growth is therefore unlikely to be repeated in the subsequent quarters in the current year. If one were to compare the results with 1QFY99, the profits has increased by 47% and operating margins has increased by 1% to 11% in the 1QFY01.

    (Rs m) 1QFY00 1QFY01 Change
    Sales 1,350 1,468 8.7%
    Other Income 3 6 106.1%
    Expenditure 1,265 1,306 3.3%
    Operating Profit (EBDIT) 86 162 88.6%
    Operating Profit Margin (%) 6.4% 11.0%  
    Interest 3 10 191.4%
    Depreciation 15 28 88.5%
    Profit before Tax 70 129 84.2%
    Tax 10 11 15.4%
    Profit after Tax/(Loss) 60 118 95.4%
    Net profit margin (%) 4.5% 8.0%  
    No. of Shares (eoy) (m) 14.5 14.5  
    Diluted number of shares 14.5 14.5  
    Diluted Earnings per share* 16.7 32.6  

    The company is targeting healthy growth through market expansion in Parachute, building volumes in Saffola, widening its retail reach and boosting exports. Further new product introduction would fuel the future growth of the company. In the domestic market Marico's key brand 'Parchute' is facing stiff competition from Dabur's 'Vatika' and HLL's 'Nihar' & 'Cococare'.

    At the current market price of Rs 263, Marico is trading at a P/E multiple of 8 times its 1QFY01 annualised earnings. In the past the company's P/E was in the range of 10-18 times. The company has the lowest market cap to sales ratio of 0.7 times.



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    Aug 16, 2017 (Close)


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