Marico Ltd - Action to continue, Maintain ACCUMULATE - Emkay

Reco: ACCUMULATE
CMP: Rs 188
Target Price: Rs 208

* Q1FY13 sales were bang in line estimate aided by robust 14% volume growth. However, APAT beat estimate led by 612 bps expansion in gross margins, APAT grew 45.7% yoy to Rs1.2bn.

* Revenue grew 20.8% yoy to Rs12.6 bn; Domestic consumer business up 22% yoy whereas International business growth moderates to 17% yoy (organic growth merely 3%).

* Key positives: Parachute dream run continues (+18% volume growth); Saffola witnessed 12% volume growth (despite lower CSD sales); gross margin expansion by 612bps.

* Favorable base in Q2FY13E - 'Action to continue'. But, concerns are rising. Would revisit rating next quarter. Maintain ACCUMULATE.

Source : Equity Bulls

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