Edible oils major, Marico Industries has recorded a 10% growth in its 2QFY01 bottomline. This growth comes on the back of a 5% decline in turnover during the same period.
Operating Profit (EBDIT)
Operating Profit Margin (%)
Profit before Tax
Profit after Tax/(Loss)
Net profit margin (%)
Earnings per share*
Current P/e ratio
The company's product portfolio includes well known brands like Parachute (coconut oil), Saffola and Sweekar (edible oils), Revive (Starch) , Sil (jams) and Hair & Care (non-sticky hair oil).
If we consider Marico's first half results in totality then, the company has put in a reasonably good performance. Though the company's turnover did not show much growth (up only 1%), Marico's bottomline surged 30% in 1HFY01.
The company's bottomline has surged largely on account of lower tax provisioning and lower raw material costs. In fact copra (a key raw material) prices were down 36% on an average. Though the company's turnover has not shown much growth in value terms, all the company's major brands have registered good volume growth in 1HFY01. Parachute grew by 6%, Saffola by 20% and Sweekar by 11%. The volume growth was not reflected in the turnover as the company had reduced its retail prices on competitive pressures.
Faced by the competitive onslaught by HLL, Marico not only cut prices, but also upped its advertising and promotional expenditure. In fact, its advertising expenses were 11.6% of 1HFY01 turnover. This is high when compared to 7.8% (advertising/sales) in 1HFY00.
Marico's stock currently trades at Rs 253, which is 7.4 times its FY01 earnings. Given the competitive pressures it faces, it has an uphill journey ahead.
LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India. Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: firstname.lastname@example.org. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407