Results update 1 – for quarter ending June 2023

results update for 5 of our Prime Stocks

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5 thoughts on “Results update 1 – for quarter ending June 2023”

  1. What kind of volume and PAT growth do u guys expect from Marico? And more importantly what should be our return expectations over long term, considering the fact that Marico is currently at PE of 50+ and currently growing in high single digits

    1. N V Chandrachoodamani

      Welcome your query sir,

      On return expectation, we think the company will deliver in line with index returns – ie, in the vicinity of 15%

      On PAT Growth, it should be doing double digit growth in FY24 and forward, also taking cues from management guidance.
      Another good part is the margin expansion even from Pre-Covid levels. Though management intends to utilize these margin gains towards higher ad spends, it will have positive impact on growth.

      We think the there will not be anymore PE contraction and hence the reco. But since PE can’t expand either, the returns form the stock will be equal to its earnings growth.

      There are interesting parts in its business that gives hope on long-term double digit growth. From a single engine growth Co (Parachute), it has already evolved into a double engined one (Saffola). It is now gaining scale in the digital brands space as mentioned in our report. So, it is shifting away from a heavily OIL focused Co to a FOOD, PERSONAL CARE & WELLNESS focused one.
      (that will de-risk it from commodity fluctuations)

      Hope this clarifies.

      Thank you

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