Marico Q3 Review - Impressive Topline Growth, Likely To Sustain: Motilal Oswal

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Motilal Oswal Report

Led by domestic volume growth of 15% (its highest in 34 quarters), Marico Ltd. exceeded expectations on the sales front, a trend that is likely to continue for the next few quarters, with all key segments doing well and a weak base in the next couple of quarters.

Strong momentum in key segments, increased confidence, and new launches in foods led us to forecast approximately 12% revenue compound annual growth rate between FY21- FY23E, much higher than the 5% CAGR witnessed over FY15-20.

At the same time, judicious price increases and expected reduction in commodity costs from current elevated levels would result in an improvement in operating margin, which were below expectations in Q3 FY21, going forward.

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