Marico - In line results; maintain Reduce - BRICS

Marico's Q3FY13 results were in-line with our estimates - revenue was up 11.0% yoy to Rs11.7bn (vs. our estimate of Rs12.5bn), operating profit jumped up by 31.7% yoy to Rs1.7bn (vs. our estimate of Rs1.7bn), and adjusted net profit grew 21.6% yoy to Rs1.0bn (vs. our estimate of Rs1.1bn).

The domestic consumer business recorded a growth of 16% yoy, led mainly by recent acquisitions. However, a lower growth in 'Parachute' (up 6% yoy vs. our estimate of 9% yoy) and 'Saffola' (up 4% yoy vs. our estimate of 10% yoy) came as a disappointment. In order to factor in Marico's performance in Q3FY13, we have lowered our FY13 and FY14 earnings estimates from Rs6.7 and Rs7.6 to Rs6.3 and Rs7.4 respectively.

We maintain our target price at Rs196, valuing Marico at 26.5x (26x earlier). Maintain Reduce.

Source : Equity Bulls

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