The Hindu Business Line : Marico up on value buying

The Rs 10-face valued Marico stock vaulted 1.67 per cent to close at Rs 524 on the NSE on Friday, spurred as it was by investors looking at acquiring value.

The FMCG outfit, analysts have noted, has seen net sales rise over 30 per cent during the last quarter. Its consumer products portfolio has increased by 37 per cent or so year-on-year, prompted by a growth in both organic and inorganic revenues. The reference, at least partly, is to brands such as Camelia, Aromatic and Nihar. The acceleration on the organic growth front was expedited by a 13 per cent volume growth in Parachute oil and a 30 per cent-plus volume growth in value-added hair oils, it is pointed out.

The company's international sales, incidentally, has witnessed a 57 per cent growth y-o-y during the quarter. However, it is also remarked that interest cost during Q2 has gone up markedly. There has been higher interest on short-term debt against acquisitions like Nihar and Fiancee.

At its current price, the Marico stock trades at about 21.7x fiscal 2007 estimated earnings and 18x fiscal 2008 estimated earnings.

On Friday, about 20,000 shares were traded on NSE. The counter's 52-week high is Rs 586.90.

Nilanjan Dey

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