Marico - Action Has Started, Maintain ACCUMULATE - Emkay

- Q4FY12 performance were directionally correct, but missed expectations; 650 bps expansion in gross margins, but APAT of Rs714 mn +240% yoy missed expectations.

- Revenue grew 22.8% yoy to Rs9.2 bn; Domestic consumer business grows 20% yoy and International business grows 37% yoy.

- Completes acquisition of Setwet, Zatak and Livon at consideration of Rs7.4 bn for revenue size of Rs1.5 bn; Rationale is unconvincing for purchase at 5X revenues.

- In sweet spot; to gain from softening of input price. Earnings growth in top quartile of consumer universe. Maintain ACCUMULATE rating with revised target price of Rs.191/Share.

Source : Equity Bulls

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