Marico - Is Street Ignoring The Risk Associated With Bangladesh? PL Capital's Analysis

PL Capital Report

We believe the street is underestimating the potential impact of current political turmoil in Bangladesh on operations of Marico Bangladesh over medium term.

We note that Marico Bangladesh accounts for ~23.3% of consolidated profits of Marico and 28% of its cash and investments. The road to recovery will be delayed and longer, more so as Bangladesh has a history of political instability on several occasions since its independence in 1971.

With the crash of its textile industry (Lifeline of Economy) and strained ties with immediate neighbors, we expect sharp spike in inflation, which can affect demand for medium term.

While we are not negative on domestic business of Marico, valuations at 46.9xFY26 and 43.6xFY27 EPS, does not leave much scope for a negative surprise in a critical territory like Bangladesh

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