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ICICI Securities Report
Positives in Marico Ltd.'s result are-
volume growth in Parachute (after three quarters of decline) led by market share gains,
continued traction in Saffola franchise (10% value growth, 13% volume growth) through aggressive new launches; foray into snacking sub-segment with launch of Munchies looks promising (increases total addressable market),
value/volume market share gains in all key segments,
healthy revenue growth in international market.
However, revenue growth in value added hair oil (down 3% YoY) has been underwhelming; impacted by general slowdown in discretionary (especially in value segment) due to inflation.
Positively, management retains 20% plus revenue compound annual growth rate guidance (in VAHO) over medium term (next two-three years). Sequential moderation (by 80 bps volume) in rural (fast moving consumer goods industry) looks better (but not structural).
We like continued execution driven revenue performance in digital first brands. Marico should also start seeing the benefits of distribution expansion in both urban (chemist channel) and rural.
Healthy Foods portfolio continues to trend well and is likely to provide another leg to growth (Rs 8.5-10 billion in FY24). The current weak macro (for VAHO) is a near-term concern. Success in foods and direct-to-consumer portfolio is exciting. We stay believers.
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More Research Reports On Marico's Q3 FY23 Results Review
Volume Trajectory Getting Back On Track With Margin Situation Comfortable: Systematix
Inline Operational Performance; Expect Margins To Improve Gradually: Dolat Capital
Green Shoots Visible As Rural Trends Improve: Prabhudas Lilladher
Core Hair Oil Category Saturated; Foods To Drive Growth: ICICI Direct
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