ABOUT THE COMPANY

Marico Limited is one of India's leading consumer goods companies operating in global beauty and wellness categories. It is Headquartered in Mumbai and present in over 25 countries across emerging markets of Asia and Africa.  It leading brands are spread across various categories of hair care, skin care, edible oils, healthy foods, male grooming and fabric care and it touches the lives of 1 out of every 3 Indians, through its portfolio of brands. The company has a pan-India distribution network with a reach of 5.6 million outlets out of a total of 12 million outlets in India.

Presence

Marico is present in 25 countries across emerging markets of Asia and Africa which includes India, Bangladesh, Malaysia, Vietnam, Egypt, South Africa and Middle Eat. It has seven factories in India, located at Puducherry, Perundurai, Jalgaon, Guwahati, Baddi, and Sanand. It holds 26% of the market share of International FMCG business.

Company’s Products

Marico caters to the need need of every individual through its well product portfolio offered by its various brands in different segments such as Parachute and Nihar Naturals in Coconut Oils segment, Saffola in Super-premium Refined edible oils, Parachute advanced, Nihar naturals and Hair & Care in Value added hair oils, Saffola oats, Coco Soul. Coconut oil and Saffola FITTIFY Gourmet Range in Healthy Foods segment, Livon Serums and Hair & Care in premium Hair Nourishment segment, Set Wet, Beardo and Parachute in Male Grooming & Styling, Kaya Youth and Parachute advanced in Skin care segment, Mediker and Veggie clean in Hygiene segment and True Elements in Breakfast segment.

1 Products for INDIA (Source Company presentation)

Figure 2 Products for Bangladesh  (Source Company presentation)

Figure 3 Products for Vietnam (Source company presentation)

Figure 4 Products for Africa (Source Company Presentation)

Figure 5 Products for MIddle EAST (Source Company's Presentation)

Figure 6 Products for Egypt (Source Company Presentation)

Company’s Coconut Oils segment has leading market share of 62%, Parachute Rigids have 52% market share, Saffola Oats have 41% market share, Value added hair oils have 27% market share. Leave – On Serums have 53% market share and Hair Gels / Waxes / Creams have 52% of the total market share in India.

Fundamentals:

Quarterly Results of Q1FY25:

Marico reported a Net Sales of Rs 2,643.00 crore in June 2024 up by 6.7% from Rs. 2,477.00 crore in June 2023. Its Quarterly Net Profit was at Rs. 464.00 crore in June 2024 up 8.67% from Rs. 427.00 crore in June 2023. Company’s EBITDA stands at Rs. 663.00 crore in June 2024 up 6.94% from Rs. 620.00 crore in June 2023. Marico’s EPS has increased to Rs. 3.60 in June 2024 from Rs. 3.30 in June 2023.

In domestic markets company recorded 4% volume growth in June Quarter and more than 90% of the domestic business either gained or sustained market share and penetration on MAT basis. On International front, company reported 10% growth in Bangladesh, 20% growth in MENA, 28% growth in South Africa and Flattened growth in South – East Asia and overall international markets recorded 10% Constant Currency growth.

Key Updates:

• Marico Limited, one of India’s leading FMCG companies, has forayed into the healthy spreads with the launch of its all-new Saffola Mayonnaise and Saffola Peanut Butter. While Saffola Mayonnaise is a healthy eggless offering made with milk cream, Saffola Peanut Butter replaces refined sugar with its perfect blend of peanuts and jaggery and comes in two delectable variants, namely ‘Crunchy’ and ‘Creamy’.
• Marico has set net zero emissions’ target in global operations for 2040. In India, however the company intends to achieve net zero in operations by 2030. Transition to renewables, investments in low-carbon technology options, carbon forestry and 100% phase-out of fossil fuels from its operations will be the key enablers for the company to transcend into its net zero, carbon neutral and climate resilient future.
• Company has also recently introduced four exciting gourmet-style flavours in its flavoured Oats range, under its flagship brand – Saffola. For the first time, Saffola Oats, India’s #1 Oats brand, will offer two exciting, sweet flavours viz Nutty Chocolate and Apple ‘n’ Almonds. Alongside expanding the portfolio of savory (Masala) oats with the launch of two new flavours viz Spicy Mexicana and Cheesy Italia.
• Company has recently integrated its Saffola Store with the Open Network for Digital Commerce (ONDC). This association is a significant milestone for Marico, as it opens new avenues for growth, collaboration, and enhanced digital experiences in the ever-evolving e-commerce landscape.
• Company has recently collaborated with Kaya to advance play in science-backed personal care. Marico has exclusive rights to scale up Kaya’s range of efficacy-based personal care products outside of its clinics. Company sees Potential ₹100 cr. revenue opportunity for Marico in 4-5 years – added growth driver for the Premium Personal Care led Digital Business. To further accelerate the portfolio diversification and premiumization of the domestic business Kaya offers a portfolio of dermatologist-recommended products, ranging from daily essentials to specialized solutions for acne, brightening, sun care, anti-ageing and hair care.

In last 3 Years the stock gave a return of 27.15% as compared to the rise of Sensex and Nifty in the same period.

Going forward, company aims to increase Foods portfolio to be 2x of FY24 scale in FY27. Company also expects the Exit ARR of Digital-First brands expected to be 2x of FY24 ARR in FY27 and Aims for Double Digit EBITDA margin in Digital-first brands in FY27. The FMCG (fast-moving consumer goods) industry in India is expected to grow at a compound annual growth rate (CAGR) of 27.9% from 2021–2027, reaching nearly US$ 615.87 billion. By 2030, the industry is expected to reach nearly US$ 1288.52 billion. Some factors contributing to the growth of the FMCG industry includes Government’s initiatives to stimulate consumption, Digital transformation for FMCG is increasing, rising disposable income in rural India, Increased demand for laundry and home care products and increased more conscious of personal and household hygiene after the COVID-19 pandemic. Marico is well poised to get the benefits of FMCG sector growth backed by various positive factors affecting that growth in upcoming years. Considering all this one can consider MARICO as long-term portfolio stock. 

HET ZAVERI

info@smartinvestment.in 

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