Marico (Q4 FY14)
Operating margins expanded by 220bps to 14.4% (on a low base) led by sharp decline in overhead, staff and advertising cost.
May 06, 2014 02:05 IST India Infoline News Service
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Marico recorded 7.3% yoy increase in consolidated revenues at Rs10.7bn during Q4 FY14 – marginally above our expectations of Rs10.5bn
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Parachute’s rigid portfolio (packs in blue bottles) witnessed ~10% yoy volume growth – a smart recovery from mere 2% reported in Q3 FY14
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International business recorded healthy 21% yoy growth in revenues at Rs2.6bn with constant currency growth 8% and volume growth 4%
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Despite steep rise in raw material cost OPM expanded by 220bps to 14.4% aided by sharp decline in overhead, staff and advertising cost
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Net profit registered 71.8% yoy growth at Rs916mn on a low base - marginally above our expectations of Rs891mn. Adjusted net profit grew by 6% yoy to Rs888mn
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We maintain Buy rating on the stock with a revised 9-month target price of Rs244
| (Rs m) | Q4 FY14 | Q4 FY13 | % yoy | Q3 FY14 | % qoq |
| Net sales | 10,698 | 9,973 | 7.3 | 11,984 | (10.7) |
| Other operating income | 22 | 13 | 67.5 | 23 | (4.4) |
| Total Income | 10,721 | 9,986 | 7.4 | 12,007 | (10.7) |
| Material cost | (5,597) | (4,410) | 26.9 | (6,206) | (9.8) |
| Personnel cost | (651) | (962) | (32.3) | (679) | (4.1) |
| Advertising cost | (1,219) | (1,257) | (3.0) | (1,341) | (9.1) |
| Other overheads | (1,710) | (2,143) | (20.2) | (1,763) | (3.0) |
| Operating profit | 1,543 | 1,215 | 27.0 | 2,018 | (23.6) |
| OPM (%) | 14.4 | 12.2 | 224 bps | 16.8 | (242) bps |
| Depreciation | (215) | (253) | (14.9) | (207) | 4.1 |
| Interest | (68) | (124) | (45.7) | (73) | (7.6) |
| Other income | 128 | 102 | 26.3 | 180 | (28.8) |
| PBT | 1,388 | 939 | 47.9 | 1,918 | (27.6) |
| Tax | (473) | (406) | 16.5 | (501) | (5.8) |
| Effective tax rate (%) | 34.0 | 43.2 | 26.1 | ||
| Minority interest | (28) |
