Marico (MARICO) Q4 18/19 earnings summary

Executive summary

• FY19 consolidated turnover rose 16% to ₹7,334 crore, with 8% underlying volume growth; adjusted PAT, excluding earlier-year tax adjustments, increased 14% to ₹930 crore.

• Recovery broadened across volumes and earnings; operating margin was 17.5%, while new product launches accelerated and international markets Bangladesh, Vietnam and MENA grew at double-digit constant-currency rates.

Financial highlights

• Revenue from operations reached ₹7,334 crore versus ₹6,333 crore in FY18, up 16%; EBITDA was ₹1,281 crore, up 13%.

• EBITDA margin was 17.5%, down 50 bps YoY; adjusted PAT was ₹930 crore, up 14%, and adjusted basic EPS was ₹7.2 versus ₹6.3.

• Reported consolidated PAT was ₹1,135 crore; it included a ₹188 crore write-back of earlier-year tax provisions. PAT attributable to owners was ₹1,118 crore.

• Operating cash flow rose 97% to ₹1,018 crore; cash generated from operations was ₹1,018 crore, and net surplus reached ₹613 crore.

• India revenue grew 16% to ₹5,756 crore; international revenue grew 16% to ₹1,578 crore, or 9% in constant currency.

Outlook and guidance

• FY20 and beyond: target 8–10% India volume growth with market-share gains; India operating margins expected to trend upward as cost pressure eases, with medium-term margins above 20%.

• Medium-term consolidated targets: 8–10% volume growth and 13–15% topline growth, depending on inflation; operating margin of 18%+ with an upward bias.

• A&P spend was 9% of sales in FY19 and is expected to rise by ~100 bps of sales on an annualised basis; FY20 India capital expenditure was estimated at ₹125–150 crore.

• International business aims for broad-based double-digit constant-currency growth and operating margins of 18%+ over the medium term; South Africa outlook remained cautious amid weak demand.

• E-commerce was ~4% of India business, with a target of at least 5% by FY20; Healthy Foods aims for 20%+ value CAGR over the medium term.