The Hindu Business Line : Marico shines on performance

FMCG counter Marico Industries jumped sharply in the last few trading sessions. Analysts attribute this to Marico's 30 per cent-plus sales growth in the first quarter of fiscal 2007, especially to the 25 per cent reported by its focused brands. The latter, they add, have increased their share to revenues to 79 per cent from 77 per cent in Q1 of fiscal 2006.

In particular, reference is being made to acquisition of Nihar, which led to margin improvement. The Rs 10-face value Marico stock, which closed at Rs 488.15 on the NSE, is currently discounting its 2007 estimated earnings and 2008 estimated earnings of Rs 20.9 and Rs 25.4 at 23.3x and 19.2x respectively.

With organic and inorganic growth options contributing to the numbers, the company is expected to report decent earnings growth over the next few years. However, increasing tax burden due to expiry of tax benefits at manufacturing units could maintain the pressure on the net profit growth, some sections feel.

Nilanjan Dey

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