3 May 2017
4QFY17 Results Update | Sector: Consumer
Marico
BSE SENSEX
29,921
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val, INRm/ Vol m
Free float (%)
S&P CNX
9,314
MRCO IN
1,290.2
411.4 / 6.2
325 / 235
7/10/2
348
40.3
CMP: INR319 TP: INR335 (+5%)
Downgrade to Neutral
Remarkable volume growth, despite weak operating environment
Financials & Valuations (INR b)
Y/E Mar
2017 2018E 2019E
Net Sales
59.2
67.5
78.1
EBITDA
11.4
12.4
14.9
PAT
8.1
9.0
10.9
EPS (INR)
6.3
6.9
8.4
Gr. (%)
12.1
10.5
21.1
BV/Sh (INR)
18.0
21.1
23.0
RoE (%)
31.5
30.3
32.7
RoCE (%)
47.7
46.1
65.4
P/E (x)
50.8
45.9
37.9
P/BV (x)
17.7
15.1
13.9
Estimate change
TP change
Rating change
Strong volume growth:
Marico’s (MRCO) consolidated net sales rose 2.2% YoY
(est. of +4.4%) to INR13.2b. Domestic volumes increased 10% YoY (est. of +7%),
despite 8% growth in the base quarter. Domestic revenues grew 6% YoY, while
reported international revenues declined 8% (-5% CC). Parachute sales grew
11% with 15% volume growth (est. of +11%), Saffola sales grew 3% with 6%
volume growth (est. of mid-single-digit increase), and Value Added Hair Oils
sales grew 9% with 10% volume growth (est. of mid-single-digit increase).
Consolidated gross margin contracted 180bp YoY (est. of -300bp) to 51.6%.
EBITDA came in 17.7% ahead of expectations, mainly led by lower-than-
expected contraction in gross margin (despite a huge increase in material
costs) and a sharp cut in A&P (-410bp YoY). EBITDA increased 20.1% YoY (est.
of +2.1% YoY) to INR2.5b, with the margin expanding 290bp YoY (est. of -30bp)
to 19.2%. Adj. PAT increased 25.5% YoY (est. of +6.2%) to INR1.7b.
FY17 performance:
Consolidated sales declined 1.6% YoY to INR59.2b. EBITDA
margin was up 200bp YoY to 19.3%. Adj. PAT rose 12.1% YoY to INR8.1b,
registering the sixth consecutive year of double-digit growth. Inventory days
rose to 67 from 58 due to an increase in costs of copra and other materials.
Downgrade to Neutral:
Strength of the business model has been
demonstrated again through double-digit volume growth. We remain positive
on the longer-term earnings growth prospects. MRCO’s investment in
distribution technology is far ahead of peers, which should serve them in good
stead over the long term. After our upgrade to Buy in December, the stock has
appreciated ~25%, and at 37.9x FY19E EPS, valuations are no longer attractive
from a one-year investment viewpoint. We thus downgrade to
Neutral
with a
target price of INR335 (40x FY19EPS, 10% premium to three-year average).
Krishnan Sambamoorthy
(Krishnan.Sambamoorthy@MotilalOswal.com); +91 22 3982 5428
Vishal Punmiya
(Vishal.Punmiya@MotilalOswal.com); +91 22 3980 4261
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.

Marico
Key quarterly charts
Exhibit 1: Overall volumes grew by 6%YoY in 4QFY17; 4% in FY17
Marico India
Segment growth (%)
Parachute Rigid
Saffola (Refined Edible Oil)
Value added hair oils
Domestic Business
4QFY16
Volume
Value
6.0
(5.0)
13.0
14.0
11.0
12.0
8.4
4.0
1QFY17
Volume
Value
7.0
(12.0)
11.0
11.0
9.0
9.0
8.0
(1.0)
2QFY17
Volume
Value
(6.0)
(19.0)
8.0
10.0
11.0
11.0
3.0
(3.0)
3QFY17
Volume
Value
(1.0)
(12.0)
6.0
7.0
(12.0)
(13.0)
(4.0)
(9.0)
4QFY17
Volume
Value
15.0
11.0
6.0
3.0
10.0
9.0
10.0
6.0
Source: Company, MOSL
Exhibit 2: Domestic volumes grew by 10% in 4QFY17
Domestic volume growth (%)
8.0
10.0
4.0
6.0 6.5
3.0
10.5
8.0
5.0
3.0
6.0 5.5
8.4 8.0
3.0
10.0
Exhibit 3:
Parachute
rigid volumes grew by 15%
Parachute volume growth (%)
10.0
5.0 4.0
1.0 2.0
8.0
8.0
6.0 7.0
5.0
11.0
4.0
6.0 7.0
15.0
(1.0)
(4.0)
(6.0)
Source: MOSL, Company
Source: MOSL, Company
Exhibit 4:
Saffola
volume growth stood at 6%
Saffola volume growth (%)
17.0
10.0
5.0
11.010.0
9.0
9.0
3.0
4.0 4.0
13.0
11.0
8.0
Exhibit 5: VAHO volumes grew by 10%
24.0
VAHO volume growth (%)
21.0
16.015.0
14.0
11.0 9.0 11.0
11.013.010.0
8.0
8.0
5.0
5.0
10.0
7.0
6.0 6.0
(1.0)
(12.0)
Source: MOSL, Company
Source: MOSL, Company
Exhibit 6: Segmental Details
4QFY15
Sales (INR m)
Domestic
International
Total
EBIT
Domestic
International
Total
EBIT margins
Domestic EBIT margins
International EBIT margins
Total
9,490
2,770
12,260
1,600
370
1,970
16.9%
13.4%
16.1%
1QFY16
14,037
3,463
17,500
2,955
583
3,539
21.1%
16.8%
20.2%
2QFY16
11,041
3,495
14,536
1,932
528
2,450
17.5%
15.1%
16.9%
3QFY16
11,944
3,359
15,303
2,610
636
3,247
21.9%
18.9%
21.2%
4QFY16
9,775
3,146
12,920
2,134
326
2,461
21.8%
10.4%
19.0%
1QFY17
13,874
3,669
17,543
3,411
701
4,112
24.6%
19.1%
23.4%
2QFY17
10,758
3,670
14,428
2,147
581
2,728
20.0%
15.8%
18.9%
3QFY17
10,811
3,354
14,165
2,521
489
3,010
4QFY17
10,352
2,869
13,222
2,509
217
3,010
23.3%
24.2%
14.6%
7.5%
21.2%
20.6%
Source: Company, MOSL
3 May 2017
2

Marico
Exhibit 7: Launched
Saffola Aura
in 4QFY17- a blend of Olive and Flaxseed oil.
Source: Company, MOSL
Revenue miss; but volumes, EBITDA and PAT better than expected
Marico posted 2.2% growth in consol. net sales (est. 4.4% growth) to INR13.2b.
Domestic volume growth was 10% (est. 7%) while overall volume growth was
6%. Domestic revenues grew 6% while reported international revenues declined
by 8% (5% decline on constant currency) affected by MENA region sales decline.
Consol. gross margin declined by 180bp YoY (est. decline of 300bp) to
51.6%. Copra costs were up 46% YoY for the quarter. Rice Bran oil was up 20%
and Liquid Paraffin (LP) was up 27% during the quarter as compared to Q4FY16.
HDPE (a key ingredient in packaging material) price was up 5% compared to
Q4FY16.
Consol. A&P expenses surprisingly declined 410bp YoY (management has called
this out as an aberration and attributed to environmental uncertainty and
deferral of new product launches to 1HFY18) and by 31.4% on an absolute basis
YoY. For full year the drop in A&P was only marginal at 40bp YoY to 11.1%.
There was a decrease in other expenditure by 60bp YoY and staff costs
increased by 10bp YoY. EBITDA margin expanded 290bp YoY (est. 30bp decline)
to 19.2% and EBITDA increased 20.1% YoY (est.2.1% YoY increase) to INR2.5b.
EBITDA was 17.7% ahead of expectations mainly led by lower than expected
decline in gross margins (despite huge increase in material costs) and extremely
sharp cut in A&P.
Adj. PAT increased 25.5% YoY (est. 6.2% increase) to INR1.7b. PAT was 18.2%
ahead of our expectation.
Domestic Performance: Volumes increase 10% with 6% sales growth
Domestic volume growth
was 10% (est 7%) while overall volume growth was
6%. Domestic sales were up 6% YoY.
Segmental growth:
Parachute sales grew 11% with 15% volume growth (ahead
of expectation of around 11%), Saffola sales grew 3% with volume growth of 6%
(est. mid-single digit volume growth), and Value Added Hair Oils (VAHO) sales
grew 9% with 10% volume growth (est. mid-single digit growth). Strong growth
in Saffola and VAHO volumes was witnessed despite 10% and 15% volume
growth in base quarter 4QFY16. There was a 4% price decrease YoY in Parachute
3
3 May 2017

Marico
while realization in VAHO was down 1% YoY and Saffola realization was down
3% YoY. The Youth brands portfolio declined 6% in value terms owing to high
base.
Marico’s rural sales grew 4% YoY (partly affected by demonetization) while
urban sales grew 9% YoY in 4QFY17. Sales in modern trade (10% of domestic
turnover) grew 17% YoY for the quarter while Sales of CSD and institutional sales
(7% of domestic turnover) were down 13% YoY due to stock correction.
Margins:
Standalone gross margins declined 250bp YoY and yet EBITDA margins
were up 350bp YoY to 20.6% due to lower ad spends (down sharply by 450bp
YoY) and 160bp decline in other expenses. Staff costs increased slightly by 10bp
YoY. Management has stated that 4QFY17 ad spends were an aberration due to
postponement of new launches to 1HFY18 and that A&P to sales will be back to
11-12% levels in FY18.
Parachute Coconut oil (rigid packs):
Parachute rigid posted extremely strong
volume growth of 15% with value growth of 11%. In 3QFY17 the volumes had
declined due to demonetization as trade inventory went down. In 4QFY17 raw
material prices shot up by 25% sequentially and the company delayed its
decision to take product prices up, eventually taking 8% price increase in March
2017. Liquidity situation also improved in the quarter. Delay in price increases
allowed the company an advantage over peers to correct the inventory of
Parachute upwards across the channels improve offtake and garner market
share gains. Guidance for volume growth in this segment going forward stands
at 5-7%. Copra costs are expected to increase further and company also expects
to take judicious price increases to balance volume growth and profitability.
Value-added hair oils
(VAHO) reported very strong growth of 10% growth on
volumes and 9% on sales despite a high base of 11% volume growth in the base
quarter. Growth continues to be higher than category growth. Volume market
leadership was increased by 150 bp YoY to 33% (12 month ended March 2017)
while value share increased 100 bp YoY to 26% over the same period. Nihar
Shanti Amla gained 200 bps YoY market share to 39% in FY17 with an exit share
of 40% indicating strong growth trajectory. Management reiterated the focus on
premiumization to drive growth. Scale benefits will lead to operating leverage
and thus improving margins despite competitive pricing. The company also
stated intention of becoming the volume market leader in the Amla Hair Oil
Category in FY18.
Saffola
posted 3% value growth led by 6% volume growth. Saffola’s market
share has increased by 283bp to 66% on 12 months ended March’17. Saffola
Oats value market share stood 27% (69% value market share in flavored oats
market on MAT basis). During the quarter, the company launched Saffola Aura
(blend of olive oil and flaxseed oil) in the super premium edibles oils space and
Saffola Multigrain Flakes in the breakfast cereal space bringing the benefits of
five grains in a breakfast bowl compared to single grain flakes available in the
market.
Youth portfolio
declined 6% in value sales due to continued demonetization
impact on category growth but has gained market share in all its segments and
management has stated that the near term growth plan looks promising. Set
Wet Gels (40% of the youth portfolio) grew market share by 391bp YoY to 58%.
3 May 2017
4

Marico
Set Wet deodorant also grew market share to 3.3% in FY17 (FY16-2.6%) in the
deodorants market.
For the domestic business, the management has guided for 8-10% volume
growth and EBITDA margins of around 20%.
International Business: Decline due to pressure on the MENA business
International sales registered a 4.6% constant currency decline (5% volume
decline).
Bangladesh (44% of International business)
revenues grew 5% in 4QFY17 with
7% volume growth. Parachute Coconut Oil reported 4% constant currency
growth with volume growth of 7% and maintained 86% market share. The
company has taken price increase of 10% towards the end of FY17 and has
guided for single digit constant currency growth in FY18. VAHO sales in
Bangladesh grew 16% in constant currency terms with strong growth in the
flagship ‘Beliphool’ brand. This segment too witnessed a price increase (of 8%)
in 4QFY17). Non coconut oil portfolio in Bangladesh is 23% of sales now
compared to 10% five years ago. Management has guided for 30-40% share of
this business in sales from Bangladesh in the next two to three years.
South East Asia - majorly Vietnam (28% of International business)
sales grew
by 11% in constant currency terms. The X-Men brand maintained market
leadership in the male shampoos market and also attained leadership in the
men’s aerosol category. The food business also grew at a healthy pace. The
company is continuing to scale up presence in Myanmar which had sales of
USD7m in FY17.
Middle East and North Africa (15% of International business)
declined sharply
by 46% YoY (constant currency) as the company chose to correct distributor
inventory. Middle East constant currency sales declined by just 41% on constant
currency basis while Egypt business reported 55% constant currency decline
Egyptian Pound has depreciated 52% against the INR in the past 12 months
Management is cautiously optimistic about this region in the near term and
positive about the medium term outlook
South Africa (7% of International business)
grew by 6% (constant currency)
despite tough macro conditions.
For the international business, the management has guided for 12-15%
constant currency revenue growth and operating margins of 16-17% in the
near to medium term.
On an overall basis, the guidance is for 8-10% volume growth and 12-15% sales
growth over the medium term with operating margins likely to be the 17%-
18% band.
3 May 2017
5

Marico
Con-call highlights
Additional information on 4QFY17
Adspend cuts in 4QFY17 were in foods, deodorants and body lotion.
Saffola- There was no price reduction some mix effect led to slight realization
decline YoY (higher sales of Activ versus Gold).
International business
MENA is only 3.1% of consolidated sales so limited impact going forward.
Middle East business recovering. Egypt will grow only after H1FY18 after
anniversarization of steep currency depreciation.
GST
GST- there will be pipeline reduction before implementation but there will be no
demand issues unlike demonetization.
GST may provide some tailwinds from 2HFY18 itself.
There will be no delay in new launches as GST, unlike demonetization, will not
affect consumption.
Ecommerce and new categories
Marico has a dedicated Ecommerce team and early results are extremely
promising.
Hair fall, male grooming and premium foods will be key categories for E-
Commerce a channel which is also useful for cross pollination current
international brands. Online sales can be 10% plus of these categories. Digital
marketing sales are already over 10% of overall adspend.
Right to win in Saffola Multi Grain Flakes launched in 4QFY17- Existing
Cornflakes have high glycaemic index and Chocos are not healthy so the entry
into multigrain flakes.
Saffola Aura launched in 4QFY17- There was a huge overlap of Saffola
Consumers who were also olive oil customers and hence the launch.
Olive oil- INR8b market growing at 25% CAGR in the past 3 years heavy metro
and modern trade skew.
Beardo stake investment is insignificant.
Innovation
Innovation will be in three buckets- a) Premiumization of core, b) bottom of
pyramid and c) new categories (mainly in super premium edible oil, male
grooming and foods).
Growth and guidance
Oats category was flat in 2HFY17. Family and kids consumption will be big
drivers for the long term.
Saffola umbrella brand- Confident of 10% volume growth especially with Aura
oil coming in as well.
Parachute- some pockets in TN and Maharashtra have high growth potential.
Parachute- there is usually 150-200 bp gain in market share in inflationary
environment and a loss of 50-100 bp in deflationary period so the ongoing
inflation is good news.
3 May 2017
6

Marico
Management will be able to guide on further price increase on Parachute only in
August.
There will be gross margin impact YoY in FY18 as the focus is more on growing
volumes between 8-10%. A&P will also rise to support new launches.
Amla Hair oil- aiming to grow 2-3% market share every year, currently 40%.
Focusing on large packs in UP and Bihar to drive higher growth.
VAHO- lower unit packs being prototyped in a few markets. Focus is more on
INR5-INR 10 rigid packs rather than sachets. Sachets of INR 1 lead to realization
issues and margin volatility.
Valuation & view
Strength of the business model has been demonstrated again through double
digit volume growth. We remain extremely positive on longer term earnings
growth prospects. Marico’s repeatedly stated commitment to longer term
volume growth is also heartening and we believe exactly the right strategy for
an emerging markets company.
Marico’s investment in technology for distribution is far ahead of peers,
particularly in the rural channel and will serve them in very good stead over the
long term. Extensive plans for mining data being made available by technology
will further widen the gap versus peers. We expect Marico to be a rural
behemoth in the coming years given that the technological edge makes them a
lot more leaner and nimble compared to peers and as conversion from
unbranded to branded and unorganized to organized has been Marico’s
strength and GST will only speed up the process more.
Marico‘s track record on earnings growth is also far superior to most FMCG
players especially considering the high volatility of its raw materials. Disclosure
and corporate governance levels are best of breed.
However, after our upgrade to BUY in December, the stock has however
appreciated by around 25% and valuations are no longer attractive from a one
year investment view point at 37.9x FY19 EPS. We downgrade to Neutral with a
target price of INR335 (40x FY19EPS, 10% premium to 3 year average).
Exhibit 9: Marico P/E premium vs. Sensex
Exhibit 8: Marico P/E (x)
53.0
45.0
37.0
29.0
21.0
13.0
5.0
10.5
27.0
PE (x)
Peak(x)
Avg(x)
45.1
Min(x)
44.2
150
120
90
60
30
0
-30
-60
Marico PE Relative to Sensex PE (%)
LPA (%)
136.2
57.0
Source: Company, MOSL
Source: Company, MOSL
3 May 2017
7

Marico
Exhibit 10: Valuation Matrix of coverage universe
Company Reco
Price
Mkt Cap EPS Growth YoY (%)
(INR)
(USD M) FY17 FY18E FY19E
Consumer
Asian Paints Neutral
Britannia
Buy
Colgate
Buy
Dabur
Neutral
Emami
Buy
Godrej
Neutral
GSK
Neutral
HUL
Neutral
ITC
Buy
Jyothy Labs Neutral
Marico
Neutral
Nestle
Neutral
Page
Buy
Parag Milk Buy
Pidilite Inds. Neutral
P&G Hygiene Neutral
United Brew. Buy
United
Neutral
Retail
Jubilant
Neutral
Titan
Neutral
1,116
3,574
1,034
276
1,071
1,806
5,136
934
277
376
319
6,705
7,368
14,714
237
730
778
1,935
1,057
484
16.7
6.7
4.4
7.8
3.7
9.4
3.4
31.3
52.4
1.1
6.4
10.1
3.7
2.6
0.3
5.7
3.2
4.4
1.1
6.7
9.5
3.0
-4.4
1.9
-2.9
11.9
-1.7
1.1
8.6
94.5
12.1
-1.6
12.1
12.9
-87.9
12.5
-5.4
71.2
-17.6
17.1
10.2
15.5
18.9
6.7
22.0
15.6
12.5
11.7
11.6
12.8
10.5
18.0
15.0
29.5
756.4
10.1
34.3
47.2
76.4
10.8
18.0
22.0
22.7
18.3
20.6
15.9
10.3
15.4
18.1
16.5
21.1
17.3
18.6
27.3
79.4
12.3
28.2
39.1
34.0
13.5
P/E (x)
FY17 FY18E FY19E
54.4
49.5
47.7
38.0
43.8
48.6
33.4
48.5
33.1
47.2
50.8
56.8
50.6
62.5
292.5
44.0
72.9
67.6
85.7
51.4
49.4
42.9
40.1
35.7
35.9
42.1
29.7
43.4
29.7
41.9
45.9
48.2
43.9
48.2
34.2
39.9
54.3
45.9
48.6
46.4
41.9
35.1
32.7
30.2
29.8
36.3
26.9
37.6
25.1
35.9
37.9
41.0
37.1
37.9
19.0
35.6
42.3
33.0
36.3
40.9
EV/EBITDA (x)
RoE (%) Div.
FY17 FY18E FY19E FY17
FY17
34.7
36.5
28.8
31.4
31.3
34.2
22.3
33.5
22.4
27.5
35.3
34.9
32.8
39.8
27.3
29.0
29.9
32.7
26.8
37.1
32.0
31.3
24.0
30.0
27.2
29.9
19.4
30.3
19.9
25.2
32.0
29.2
28.1
30.6
14.9
25.6
26.5
26.2
18.2
32.9
27.2
24.7
19.8
25.1
22.9
26.1
17.3
26.3
16.6
22.4
26.6
24.8
23.3
24.2
10.2
22.4
20.9
20.3
13.9
28.3
32.8
43.1
54.9
28.4
33.8
22.5
24.6
67.6
28.4
16.4
36.7
39.0
29.0
41.3
1.3
27.9
12.6
20.8
10.1
21.5
1.0
0.7
1.5
0.9
1.0
0.7
1.1
2.0
1.9
1.1
1.0
0.9
0.9
0.7
0.0
0.7
0.1
0.0
0.2
0.6
Note: For Nestle FY16 means CY15
Source: Company, MOSL
3 May 2017
8

Marico
Financials and Valuations
Income Statement
Y/E March
Net Sales
Change (%)
COGS
Gross Profit
Margin (%)
Operating Expenses
EBITDA
Change (%)
Margin (%)
Depreciation
Int. and Fin. Charges
Other Income - Recurring
Profit before Taxes
Change (%)
Margin (%)
Current Tax (excl MAT Ent)
Tax Rate (%)
Minority Interest
Profit after Taxes
Change (%)
Margin (%)
Reported PAT
2013
45,843
15.5
22,414
23,429
51.1
17,290
6,140
29.8
13.4
866
580
494
5,187
29.0
11.3
1,186
28.2
-98
3,627
15.0
7.9
3,959
2014
46,762
2.0
24,088
22,674
48.5
15,301
7,374
20.1
15.8
769
345
685
6,946
33.9
14.9
1,793
27.4
-187
4,854
35.3
10.4
4,854
2015
57,203
22.3
31,356
25,847
45.2
17,274
8,574
16.3
15.0
843
230
716
8,217
18.3
14.4
2,383
28.8
-114
5,735
16.0
10.0
5,735
2016
60,148
7.0
30,777
29,371
48.8
18,954
10,417
21.5
17.3
949
206
1,030
10,292
25.3
17.1
3,054
29.7
-5
7,233
23.8
12.0
7,233
2017
59,180
-1.6
28,491
30,690
51.9
19,276
11,414
9.6
19.3
903
166
1,152
11,497
11.7
19.4
3,377
29.4
-10
8,110
12.1
13.7
8,110
(INR Million)
2018E
67,520
14.1
32,914
34,607
51.3
22,172
12,435
8.9
18.4
1,124
220
1,373
12,464
8.4
18.5
3,490
28.0
-10
8,964
10.5
13.3
8,964
2019E
78,124
15.7
37,613
40,511
51.9
25,595
14,917
20.0
19.1
1,244
246
1,666
15,093
21.1
19.3
4,226
28.0
-10
10,857
21.1
13.9
10,857
Balance Sheet
Y/E March
Share Capital
Reserves
Net Worth
Loans
Capital Employed
Gross Fixed Assets
Intangibles
Less: Accum. Depn.
Net Fixed Assets
Capital WIP
Goodwill
Investments
Current
Non-current
Curr. Assets, L&A
Inventory
Account Receivables
Cash and Bank Balance
Others
Curr. Liab. and Prov.
Current Liabilities
Provisions
Net Current Assets
Deferred Tax Liability
Application of Funds
E: MOSL Estimates
2013
1,290
18,526
19,815
8,719
28,885
8,091
8,918
-4,261
12,748
1,477
3,955
1,516
1,515
1
17,377
8,627
1,966
2,668
4,117
8,129
6,919
1,210
9,247
-58
28,885
2014
1,290
12,317
13,606
6,798
20,762
8,614
1,020
-3,301
6,333
44
2,543
3,105
3,105
0
17,624
7,962
2,232
4,064
3,366
8,791
7,934
857
8,833
-96
20,762
2015
1,290
16,958
18,248
4,279
22,664
8,807
1,034
-3,973
5,868
30
4,892
2,838
2,838
0
17,625
9,947
1,768
2,049
3,861
8,511
7,471
1,040
9,115
-79
22,664
2016
1,290
19,678
20,968
3,317
24,428
9,267
1,060
-4,868
5,458
367
4,980
4,164
4,164
0
19,261
9,258
2,524
3,097
4,382
9,804
8,642
1,162
9,458
1
24,428
2017
1,291
21,966
23,257
4,667
27,923
10,707
1,020
-5,771
5,957
116
4,795
5,919
5,919
0
21,866
12,534
2,470
2,273
4,589
10,518
9,087
1,431
11,348
-211
27,923
(INR Million)
2018E
1,291
25,974
27,264
5,117
32,381
11,707
1,020
-6,895
5,833
116
4,795
7,103
7,103
0
26,176
10,653
3,093
7,162
5,269
11,604
10,071
1,533
14,573
-38
32,381
2019E
1,291
28,375
29,666
5,567
35,232
12,957
1,020
-8,138
5,839
116
4,795
8,524
8,524
0
30,052
14,314
3,578
6,088
6,072
13,947
12,198
1,749
16,106
-147
35,232
3 May 2017
9

Marico
Financials and Valuations
Ratios
Y/E March
Basic (INR)
EPS
Cash EPS
BV/Share
DPS
Payout %
Valuation (x)
P/E
Cash P/E
EV/Sales
EV/EBITDA
P/BV
Dividend Yield (%)
Return Ratios (%)
RoE
RoCE
RoIC
Working Capital Ratios
Debtor (Days)
Asset Turnover (x)
Leverage Ratio
Debt/Equity (x)
2013
2.8
3.7
15.4
0.3
8.9
2014
3.8
4.4
10.5
2.0
53.1
2015
4.4
5.1
14.1
1.2
28.1
2016
5.6
6.3
16.3
3.4
60.2
2017
6.3
7.0
18.0
3.0
47.7
2018E
6.9
7.7
21.1
3.2
46.1
2019E
8.4
9.3
23.0
5.5
65.4
113.4
85.3
9.1
67.7
20.8
0.1
84.8
73.2
8.8
55.7
30.2
0.6
71.8
62.6
7.2
47.9
22.6
0.4
56.9
50.3
6.8
39.1
19.6
1.1
50.8
45.7
6.9
35.8
17.7
0.9
45.9
41.3
6.0
32.4
15.1
1.0
37.9
34.5
5.2
27.0
13.9
1.7
23.2
17.1
19.9
16
1.6
29.0
21.3
26.1
17
2.3
36.0
27.7
35.2
11
2.5
36.9
31.4
38.6
15
2.5
36.7
31.5
40.8
15
2.1
35.5
30.3
43.3
17
2.1
38.1
32.7
51.1
17
2.2
0.4
0.5
0.2
0.2
0.2
0.2
0.2
Cash Flow Statement
Y/E March
OP/(loss) before Tax
Int./Div. Received
Depreciation
Interest Paid
Direct Taxes Paid
(Incr)/Decr in WC
CF from Operations
(Incr)/Decr in FA
Free Cash Flow
(Pur)/Sale of Investments
CF from Invest.
(Incr)/Decr in Debt
Dividend Paid
Others
CF from Fin. Activity
Incr/Decr of Cash
Add: Opening Balance
Closing Balance
E: MOSL Estimates
2013
5,187
-494
866
580
-1,186
-527
4,427
-9,436
-5,009
1,440
-7,996
871
-385
4,429
4,915
1,346
1,321
2,667
2014
6,946
-685
769
345
-1,793
1,811
7,391
8,807
16,199
-1,589
7,218
-1,921
-2,673
-8,619
-13,213
1,397
2,668
4,064
2015
8,217
-716
843
230
-2,383
-2,296
3,895
-193
3,702
267
74
-2,519
-1,745
-1,720
-5,984
-2,015
4,064
2,049
2016
10,292
-1,030
949
206
-3,054
705
8,068
-822
7,246
-1,326
-2,148
-963
-5,025
1,115
-4,872
1,048
2,049
3,097
2017
11,497
-1,152
903
166
-3,377
-2,715
5,322
-1,150
4,172
-1,755
-2,905
1,350
-4,530
-61
-3,241
-824
3,097
2,273
(INR Million)
2018E
12,464
-1,373
1,124
220
-3,490
1,665
10,610
-1,000
9,610
-1,184
-2,184
450
-4,832
845
-3,537
4,890
2,273
7,162
2019E
15,093
-1,666
1,244
246
-4,226
-2,607
8,084
-1,250
6,834
-1,421
-2,671
450
-8,304
1,367
-6,487
-1,074
7,162
6,088
3 May 2017
10

Marico
Corporate profile
Company description
Marico Limited is one of India's leading consumer
products companies operating in the beauty and
wellness space. Currently present in 25 countries
across emerging markets of Asia and Africa, Marico
has nurtured multiple brands in the categories of hair
care, skin care, health foods, male grooming, and
fabric care. Marico's India business markets household
brands such as Parachute Advansed, Saffola, Hair &
Care, Nihar, Mediker, Revive, Manjal, Setwet, Zatak
and Livon among others that add value to the life of 1
in every 3 Indians.
Exhibit 2: Shareholding pattern (%)
Mar-17
Promoter
DII
FII
Others
59.7
4.2
29.1
7.0
Dec-16
59.7
4.1
28.7
7.5
Mar-16
59.7
3.3
29.3
7.8
Source: Capitaline
Exhibit 1: Sensex rebased
Source: MOSL/Bloomberg
Exhibit 3: Top holders
Holder Name
First State Investments Icvc- Stewart
Investors Asia Pacific Leaders Fund
Arisaig Partners (Asia) Pte Ltd. A/C Arisaig
India Fund Limited
Cartica Capital Ltd
Life Insurance Corporation Of India
Prazim Trading and Investment Co. Pvt. Ltd.
% Holding
4.6
2.2
1.9
1.9
1.3
Source: Capitaline
Note: FII Includes depository receipts
Exhibit 4: Top management
Name
Harsh Mariwala
Saugata Gupta
Surender Sharma
Designation
Chairman
Managing Director & CEO
Company Secretary
Exhibit 5: Directors
Name
Harsh Mariwala
Saugata Gupta
Rajen Mariwala
Anand Kripalu*
Atul C Choksey*
Name
B S Nagesh*
Hema Ravichandar*
Nikhil Khattau*
Rajeev Bakshi*
Source: Capitaline
*Independent
Exhibit 6: Auditors
Name
Ashwin Solanki & Associates
Ernst & Young LLP
Price Waterhouse
Internal
Statutory
Type
Cost Auditor
Exhibit 7: MOSL forecast v/s consensus
EPS
(INR)
FY17
FY18
FY19
MOSL
forecast
6.3
6.9
8.4
Consensus
forecast
6.3
7.2
8.4
Variation
(%)
0.8
-4.4
0.4
Source: Bloomberg
Source: Capitaline
3 May 2017
11

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Marico
Disclosure of Interest Statement
Analyst ownership of the stock
Served as an officer, director or employee -
MARICO
No
No
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12