Arihant Capital is bullish on Marico has recommended buy rating on the stock with a target price of Rs 435 in its research report dated May 06, 2019.
Marico came out with good set of numbers in Q4FY19. Consolidated results were mostly in line with our estimate. Consolidated revenue for the quarter grew 8.7% YoY to Rs 16090 mn against our estimate of Rs 16490 mn. EBITDA for Q4FY19 came at Rs 2830 mn (estimate Rs 2940 mn) a growth of 12.3% YoY. EBITDA margin increased 56 bps YoY to 17.6% for the quarter against 17% in Q4FY18. Adjusted PAT (adjusted for one time tax write back of Rs 1880 mn) for the quarter stood at Rs 2130 mn ahead of our estimate of Rs 2010 mn, a growth of 18% YoY. We like Marico over other FMCG peers like Dabur; as Marico is relatively insulated from the macro slowdown and weak demand environment plaguing other FMCG players.
Outlook
Also multiple tailwinds like deflationary copra cycle, highest gross margin in past 8 quarters and revival in Saffola portfolio keep our bullish stance intact on Marico. Maintain Buy with a revised target price of Rs 435.
