Marico (MARICO) Q4 04/05 earnings summary

Executive summary

• FY05 sales and services reached Rs. 1,012.8 crore, crossing the Rs. 1,000 crore milestone; reported PAT rose 19% YoY to Rs. 70.2 crore.

• International business turnover reached Rs. 103 crore, over 10% of total; the portfolio shifted further toward higher-margin products and services.

Financial highlights

• Consolidated revenue was Rs. 1,012.8 crore vs. Rs. 888.4 crore in FY04; PBT rose 14% to Rs. 74.3 crore and PAT rose 19% to Rs. 70.2 crore.

• Consumer Products sales and services were Rs. 986.4 crore vs. Rs. 879.3 crore; PBT was Rs. 87.4 crore vs. Rs. 73.3 crore.

• International FMCG sales rose 29% to Rs. 96 crore from Rs. 74 crore; total international turnover, including Kaya and Sundari, was Rs. 103 crore.

• Operating cash inflow was Rs. 52.4 crore vs. Rs. 79.7 crore in FY04; investing outflow was Rs. 58.5 crore, including Rs. 49.7 crore of fixed-asset purchases.

Outlook and guidance

• FY06 priorities: sustain new-product development through prototypes, realign the portfolio toward higher value add, and judiciously accelerate Kaya clinic expansion.

• Kaya was expected to reach PBIT break-even during FY06; Sundari remained in an investment phase, with PBIT break-even expected in 2–3 years.

• VAT-related uncertainty was expected to reduce April FY06 sales by 10–15%; supply and demand conditions were being monitored.