Marico - March 2013 Results Preview - Motilal Oswal

- We expect sales growth of 12% to INR12.2b led by 8-10% domestic organic volume growth.

- Marico has taken selective price promotions/cuts to drive volume growth in its core categories.

- We note that all raw materials, after remaining benign for a year, have shown a modest QoQ increase. Copra prices are up 14% QoQ (down 2% YoY), while kardi is up 35%, rice bran down 1% and safflower up 14%.

- We expect margin expansion of 90bp to 12.9% due to benefits from lower cost inventory and higher base of other expenses.

- Expect PAT growth of 28% due to lower base - base quarter PAT was flat.

- The stock trades at 28.1x FY14E EPS and 22.5x FY15E EPS. Buy.

Source : Equity Bulls

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