{"id":2102,"date":"2021-08-03T12:11:32","date_gmt":"2021-08-03T12:11:32","guid":{"rendered":"http:\/\/www.assetmultiplier.co.in\/blog\/?p=2102"},"modified":"2021-08-03T12:20:34","modified_gmt":"2021-08-03T12:20:34","slug":"volume-recovery-on-cards-margins-to-improve-in-h2fy22-marico","status":"publish","type":"post","link":"https:\/\/www.assetmultiplier.co.in\/blog\/2021\/08\/03\/volume-recovery-on-cards-margins-to-improve-in-h2fy22-marico\/","title":{"rendered":"Volume recovery on cards, Margins to improve in H2FY22: Marico"},"content":{"rendered":"<p><b>Update on Indian Equity Market:<\/b><\/p>\n<p><span style=\"font-weight: 400;\">On Tuesday, markets ended higher with Nifty closing 246 points to close at 16,130. TITAN (+4.0%), HDFC (+3.8%), and INDUSINDBK (+3.5%) were the top gainers on the index while JSWSTEEL (-0.8%), SHREECEM (-0.3%), and BAJAJ-AUTO (-0.3%) were the top losers for the day. Among the sectoral indices,\u00a0 FMCG (1.7%), FINANCIAL SERVICES (1.7%), and AUTO (1.6%) were the top gainers, while MEDIA (-0.8%), METAL (-0.1%) were the only losers.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Excerpts of an interview with Mr. Saugata Gupta, MD &amp; CEO, Marico on CNBCTV18 dated 2nd August 2021:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">1QFY22 began with the momentum that was handed over from the last quarter of FY21. May sales were affected due to the 2nd wave of lockdown. Recovery was seen in June, and supply-side issues are slowly improving.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Growth rates are improving drastically in the South, which is the company\u2019s stronghold. Barring major disruptions, the company expects to deliver 8-10% volume growth.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Gross margins declined both sequentially and YoY. This was due to raw material costs pressure, both in copra and vegetable oil-based products. The company took price hikes which resulted in less pressure on margins.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The company expects Copra prices to come down and some deflationary easing on margins and hopes to record 19%+ margins for the rest of the year.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The company makes lower gross margins in the food business and expects margins to improve with scale. The company expects volumes to grow in soya, honey and oodles, and add around 100 crores to the top line.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The company\u2019s focus is to add volume growth and expects margins to grow with scale. However, the company expects more product diversification over the next 4-5 years.<\/span><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><b>Asset Multiplier Comments:<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The food and FMCG Industry has adapted to the pandemic imposed changes. Despite the pandemic, the volumes have improved and may recover sharply soon with further unlocking. With expanding product portfolio, the growth rates may be significantly higher.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Marico has an established portfolio and brand awareness with consumers which it can leverage to expand volumes to grow further and deliver value to shareholders.<\/span><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><b>Consensus Estimates (Source: market screener website):\u00a0<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The closing price of Marico was \u20b9544\/- as of 03-August-2021.\u00a0 It traded at 54x\/45x the EPS estimate of \u20b910\/\u20b9 12 for FY22E\/23E.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The consensus price target is \u20b9 560\/- which trades at 47x the EPS estimate for FY23E of \u20b9 12\/-<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Disclaimer: &#8220;The views expressed are for information purposes only. The information provided herein should not be considered as investment advice or research recommendation. The users should rely on their own research and analysis and should consult their own investment advisors to determine the merit, risks, and suitability of the information provided.&#8221;<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Update on Indian Equity Market: On Tuesday, markets ended higher with Nifty closing 246 points to close at 16,130. TITAN (+4.0%), HDFC (+3.8%), and INDUSINDBK (+3.5%) were the top gainers on the index while JSWSTEEL (-0.8%), SHREECEM (-0.3%), and BAJAJ-AUTO (-0.3%) were the top losers for the day. Among the sectoral indices,\u00a0 FMCG (1.7%), FINANCIAL [&hellip;]<\/p>\n","protected":false},"author":12,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[393],"tags":[210,109,156,159],"_links":{"self":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts\/2102"}],"collection":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/comments?post=2102"}],"version-history":[{"count":2,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts\/2102\/revisions"}],"predecessor-version":[{"id":2105,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts\/2102\/revisions\/2105"}],"wp:attachment":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/media?parent=2102"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/categories?post=2102"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/tags?post=2102"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}