Marico Q4 Review - Growth Trajectory Turns Positive; Margins Set To Sustain Around Current Highs: Systematix

Systematix Research Report

Marico Ltd. delivered an in-line performance with a soft topline performance offset by strong margin improvement despite higher advertising and promotion spends and employee cost. Revenue /Ebitda/profit after tax growth came in at 1.7%/12.5%/5.3% YoY respectively, led by 10% constant currency growth in the international business and 3% volume growth in the domestic business, which saw a mild 0.2% YoY revenue drop.

While Parachute/foods saw 2%/24% value growth, premium personal care/digital brands reached a average rate of retrurn of Rs 3 billion/4.5 billion and Saffola/value added hair oil saw revenue decline of 16%/7%.

Gross margin expanded sharply by 417 bps YoY to 51.6%, Ebitda margin expanded 186 bps YoY to 19.4% with stronger gross margins partially offset by higher A&P spends (+55 bps), employee costs (+53 bps) and other expenses (+123 bps).

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