Arihant Capital has given Hold recommendation for Marico with a target price of Rs. 557 in its research report issued on May 06, 2022

Arihant Capital’s research report on Marico

The overall performance of the company was in line with our estimates on all fronts, marginally underperforming on some of them. Marico’s Q4FY22 Net Revenue grew by 7.41% YoY to INR 2,161 Cr (-10.22% QoQ). This almost met our quarterly revenue estimate of INR 2,193 Cr by 7.46%. Q4FY22 Gross Margin grew by 33bps YoY 44.47% (76bps QoQ). Q4FY22 EBITDA grew by 8.76% YoY to INR 346 Cr (-19.72% QoQ). EBITDA Margin grew by 16bps YoY to 16.01% (-190bps QoQ). This missed our quarterly EBITDA estimate of INR 351 Cr by 1.42%, and our EBITDA Margin estimate of 16.01%. Q4FY22 Consolidated PAT grew 23.56% YoY to INR 278 Cr (-11.46% QoQ). PAT Margin grew by 168bps YoY to 12.86% (-18bps QoQ). This beat our quarterly PAT estimate of INR 250 Cr by 2.8%.

Outlook

We assign a TP of INR 557, valued at a P/E of 50x on the FY24E EPS of INR 11.3. Marico has been taking proactive pricing measures to offset the slowdown in volumes.

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