• Marico's 3QFY20 pre-quarter update was below expectations suggesting a marginal decline in domestic sales volumes, while benign raw material cost will continue to aid margin expansion.
• Going ahead sales performance should witness some improvement led by focused marketing initiatives and pricing interventions.
• Additionally, resurfacing of inflationary trend in copra prices may lead to some subsiding of competition in coconut oil.
• However, even after factoring an improvement in volume growth, expect modest revenue CAGR of 11% during FY20e-22e. Further the EBITDA margin will peak out in the short term during FY20 and consequently expect a 9% CAGR in recurring PAT during FY20e-22e.
Disclaimer: The above report is compiled from information available on public platforms. inChat team advises users to check with certified experts before taking any investment decisions.
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