Marico (MARICO) Q4 05/06 earnings summary

Executive summary

• FY06 sales and services rose 14% to Rs. 1,143.9 crore; PAT grew 24% to Rs. 86.9 crore, supported by flagship-brand growth and improved operating margins.

• Growth combined organic brand expansion with four strategic acquisitions in beauty and wellness; Nihar strengthened the coconut-oil franchise, while Kaya reached cash break-even.

Financial highlights

• Consolidated PBT was Rs. 98.0 crore vs. Rs. 74.3 crore in FY05; PAT was Rs. 86.9 crore vs. Rs. 70.1 crore.

• Q4 FY06 total revenue was Rs. 297.9 crore, PBT Rs. 24.7 crore and PAT Rs. 24.0 crore; FY06 EPS was Rs. 14.98 vs. Rs. 12.09.

• Cash profits increased to Rs. 137.2 crore from Rs. 82.8 crore; EVA rose to Rs. 50.7 crore from Rs. 46.0 crore.

Outlook and guidance

• Over the next 3–5 years, priorities include growing leadership categories, gaining hair-oil share, scaling new-product prototypes and expanding internationally through organic and inorganic routes.

• Kaya was expected to turn PBT-positive in FY07; Sundari was expected to remain in investment mode, with break-even not expected immediately.

• FY07 plans included further product prototypes; established-brand profits would support new launches, while pricing and portfolio focus were intended to sustain margins.