Marico Limited (ML)
Marico
Limited (ML), is one of the leading Fast Moving Consumer Goods (FMCG) player in
the Indian Market. The company was incorporated in the year 1988.at the time of
incorporation it was known as Marico Foods Limited. The name Marico Industries Limited
came into being in the year 1989. . In the year February 2004 there was an Amalgamation of Anandita Arnav Trading &
Investment Private Ltd, Madhav Nandini Trading & Investment Private Ltd,
Rajvi Rishabh Trading & Investment Private Ltd and Rishabh Harsh Trading
& Investment Private Ltd.
Marico's
Products and brand names are well known to the Indian household. Brands like
Parachute, Saffola, Kaya, Sundari and Fiancee enjoy good consumer confidence
and trust. Significant market share is enjoyed by these products. Marico has built up extensive marketing
network more than 20 countries in the Middle East, Asian sub-continent,
Australia and USA.
In
1989, the company acquired Rasoi
Industries Limited. In 1990, the company entered into an agreement with Bombay
Oil Industries Ltd (BOIL) for the use of the brands Parachute and Saffola. The
Company established a new plant in Kerala to manufacture Parachute Coconut Oil.
This is a good location because Kerala is a state with large coconut
plantations. The Kerala unit has the capacity to produce 24000 tonnes of coconut oil per annum. In the
year 1995, Marico acquired the Brand SIL' from KFL.
Marico
introduced two products in 1997 Sweekar cotton
seed oil and Sweekar mustard oil. The company established two separate
production units one at Jalgaon to process the cotton seeds and another one at Jaipur
for the mustard oil. in the year 1998 the Company made the joint venture
between a Lever group company and Nissin of Japan enabling its products
distribution through HLL's networks. Marico acquired the company Sundari LLC in
2003 In the year of 2004, the company launched new products like Silk-n-Shine.
In
the year 2006, Marico acquired Hindustan Lever Limited's Nihar for Rs 216
crores. In the following year, the company forayed into South African market.
Marico also acquired the consumer division of Enaleni Pharmaceuticals. In the
year 2008 Marico made some change in the business style. It sold its processed
foods business, Sil' to Good Food Group. By making correct decisions on acquisitions and
mergers the company has managed to corner a market capitalisation of 14,772.37
Crores, which is very impressive and third largest after Godrej and Dabur.
As
on 30th April the following Mutual funds have invested in Marico.
Franklin
India Prima Plus - (G) 1854.40
Cr
Birla Sun
Life Midcap Fund - Plan A (G) 1096.97 Cr
HDFC Mid-Cap
Opportunities Fund (G) 2647.68 Cr
UTI-Dividend
Yield Fund (G) 3302.10 Cr
Looking
at the available financials Marico has seen growth of 9.7% yoy during Q4 FY13. Revenue from international business seems to
have declined by 1%. Profit before tax has increased from last year’s 1088 to
1189 Crores. The profit after tax has been adjusted to 507 which is lower than
the last years’ 714 Crores. Profit after tax (PAT) is adjusted to 5.1%.
According to the available financial
data, the material cost has declined from that of last year. The personnel and
advertising cost have slightly increased form that of last Q4.
Marico believes in the coming FY14,
it could see larger volume growth. The company’s interest costs remain
unchanged from that of last year. However this could be reduced in the coming
FY14.
At
the time of writing this note the shares of the company had closed the trade at
229.75. Since the beginning of this year this stock has been moving sideways.
This stock is ideal for short term investors. For traders I would say a buy could be initiated around Rs. 213,
which is a good support. A target of 237 can be marked for exiting the stock.
