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A C Choksi

Share Brokers Private Limited

C Choksi Institutional Research [email protected] 1

Nurturing Wealth

Initiation RepoSector: FMC

Marico LimitedWell oiled to stride high !!!

Swati GuptaSenior Analyst

Email :Tel: 91-22-3021 9046

Mehul Jhaveri - Technical Analys

[email protected]

Recommendation: BUTarget Price: Rs. 1
mailto:[email protected]:[email protected]

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Investment Summary :

Lifestyle changes in India to scale up demand for Saffola and

Premium Hair Oils

Parachute-well oiled for a high growth stride

International Business Group (IBG) to witness rapid growth

India's economic growth has accelerated significantly over the past

two decades; well synchronized with robust pace of urbanization.

With rising urbanization and improving household disposable

income, consumers are gradually becoming health conscious. This

persistent shift for India over past two decades augurs well for

Marico's business model, which is increasingly gaining traction in

Health care and Hair care space via Saffola and Premium Hair oil

brands. The company is likely to witness a robust demand for both

the segments. In our view, Saffola will be a major growth driver for

Marico and its volume and value growth will register a CAGR of

17.5% and 24.5% respectively during FY2011-2014E. The value

added hair oils category is expected to register a steady growth of

28.3% CAGR during the period FY2011-2014E.

Marico is the market leader in the coconut oil (CNO) market in India

through its flagship brand Parachute. Marico is well-positioned tobecome the key beneficiary of changing preferences of Indian

consumers as there exists a large headroom for growth with 40%

market share with unorganized players. Marico has well defined

growth strategy in place to expand in hair care segment 1) by

improving profitability in coconut oil segment, where it enjoys high

pricing power 2) to expand its hair care basket by launching new

product variants under its flagship brand Parachute. We believe

rising pricing power, better product portfolio and favorable

competition dynamics wil l drive growth momentum in the hair care

space.

IBG currently contributes approximately 23% of Marico's total

revenue and has been growing at a CAGR of approximately 36%

over the past 4 years. Going forward, we expect the IBG to grow at a

CAGR of 21.5% between 2011 and 2014 and by FY14 it is expected

to contribute 25 - 26% of the total revenue.

A C Choksi Share Brokers Private Limited

C Choksi ResearchInstitutional [email protected] 2

Nurturing Wealth

Research Report|FMCG May 23, 201

Recommendation: BUYarget Price (Rs.) 158 .0

ec om me ndation Price (Rs.) 135 .0

otential Return (%) 17%

SE Sensex 17993 ock D ata

SE Code 531642

SE Code MARICO

oomberg MRCO IN

euters Code MRCO .BO

2-Week Range (Rs.) 153/99.8 ey Financials

hares Outstanding (mn) 614 .4

a ce Value (Rs.) 1

arket Capita l (Rs. bn) 84 .2

a st 3 Yrs Sales Growth (%) 14 .5

a st 3 Yrs PAT Growth (%) 14 .6

ividend Payout (%) 11%

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Valuation:

We are initiating coverage on Marico for 12-18 month horizon, with a target price of Rs. 158

per share based on DCF Valuation method. Our DCF valuation is based on a WACC of

9.65% and perpetual growth rate of 5.0%.

The stock is currently, trading in the 18-22x two-year forward PE band. We believe that th

stock should sustain in this trading range on account of increasing awareness towards healt

care, economic recovery and consumers preference to uptrade with increase in income leve

and urbanization. Further, Kayas turnaround and strong growth in International busines

group will also give thrust to overall profitability and revenue growth. Our DCF-based targe

price implies an earnings multiple of 21.6x FY13 earnings which is within the trading range.

A C Choksi Share Brokers Private Limited


Nurturing Wealth


FINANCIAL SUMMARY

Particulars (Rs. Mn) FY10 FY11 FY12E FY13E FY14E

Tota l Re venue 2 6, 79 0 3 1, 562 3 7, 383 44 ,3 17 52 ,4 5 0

EBITDA 3,934 4,377 5,232 6 ,397 7 ,99 6

Post-Tax Income/(Loss) 2,317 2,864 3,446 4 ,479 5 ,78 8

Earnings (Rs.) 3 .80 4 .66 5 .61 7.29 9.4 2

EPS Growth 22 .7% 22 .6% 20 .3% 30.0% 29.2 %

EBITDA Margin 14 .7% 13 .9% 14 .0% 14.4% 15.2 %

PE (x) 35.5 29.0 24.1 18 .5 14 .3

P/BV (x) 12.7 9.1 6.8 5 .1 3 .9

EV/EBITDA (x) 21.9 20.2 16.5 13 .0 9 .8

EV/Sales (x) 3.2 2.8 2.3 1 .9 1 .5

RO E 35% 31% 28% 28% 27 %

RO CE 30% 22% 26% 30% 32 %

Source: Company, A C Choksi Institut ional R esearch

Two year forward PE-Band

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Company Overview:

Business Description:

Marico is one of the leading Indian FMCG players in the beauty and wellness space

offering products and services in hair care, health care and skin care segments to

consumers in domestic and international markets. The company was incorporated on

13th October 1988, under the name Marico Foods Ltd, and it began commercial

operations in April 1990 when it took over the consumer products division of Bombay Oil

Industries. Marico acquired Parachute and Saffola brands from Bombay Oil Industries in

FY 2000. On April 25 2005 the company was renamed as Marico Limited and subsequently

got listed on the Bombay Stock Exchange in 1996. Based in Mumbai, the company has a

distribution network of over 3.3 mn outlets in India and overseas. Marico's operations areprimarily based in India with flourishing international presence primarily in Middle East,

SAARC countries, Egypt and South Africa. The manufacturing facilities of the company

are located at Goa, Kanjikode, Jalgaon, Pondicherry, Dehradun, Baddi, Ponta Sahib and

Daman supported by subcontracting units.

The company's product portfolio comprises of well known brands such as Parachute,

Saffola, Hair & Care, Nihar, Shanti Amla, Mediker and Revive. Apart from the robust

growth led by introduction of new products under flagship brands, Marico pursued the

inorganic route aggressively to accelerate growth and capture market share. The companyhas strengthened its product portfolio through acquisitions in domestic and international

markets.

Marico's business structure is segregated into three Strategic Business Units (SBU's):

Consumer Products Business (Domestic) Includes coconut oil, hair oil, edible oil, hair

care products, fabric care products and processed foods.

Consumer Products Business (International) Includes coconut oil, hair creams & gels,hair care products and health care products.

Kaya Marico offers hair care and skin care services through a chain of clinics under

the brand name Kaya and Derma Rx.



Research Report|FMCG

Nurturing Wealth

May 23, 201

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Business Structure

Source: Company, A C Choksi Institutional Research

Consumer Products Business (Domestic):

Coconut Oil: Marico's coconut oil basket primarily comprises of Parachute, Oil of

Malabar and Nihar with an indicative market share by volume of approximately 52.6% as

on March 2011. Marico markets coconut oil mainly through its flagship brand, Parachute

which is a market leader in the industry with an approximate volume market share of

45.8% as on March 2011. Marico acquired Nihar from Hindustan UniLever Limited

(HUL) in February 2006 which has a strong equity in the eastern region with market share

of 6.0%.

Hair Oil: Marico's hair oil portfolio comprises of Parachute Jasmine, Nihar Naturals,

Hair & Care, Parachute Advansed and Shanti Amla with an indicative market share of 23%

in FY11. Parachute Jasmine and Hair & Care are light, fragrant and non sticky hair oils

which target a specific consumer group in the 18-24 year age bracket. Parachute Advansed

is a combination of coconut oil and other essential oils, targeted at young females and is

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Nurturing Wealth


priced higher than company's flagship Parachute coconut oil brand. Shanti Amla is the

second-largest brand in India in the amla category competing with the likes of Dabur Amla

Oil.

Edible Oil:Marico offers refined edible oil in the premium segment through its Saffola

brand. Saffola is Marico's flagship product which is positioned on the good for heart

platform and enjoys a strong brand loyalty. Leveraging on the success of the Saffola brand,

the company launched three blends Saffola Tasty Blend (corn oil and safflower oil),

Saffola Gold (80% rice bran oil & 20% safflower oil) and Saffola Active (rice bran and soya

oil). As Saffola is promoted on the heart health platform it enjoys premium pricing over

the other edible oil brands.

Functional foods under Saffola brand: With evolving tastes and preferences of

customers, Marico exploited available opportunities by prototyping products on its

existing flagship brands. The company launched a number of health friendly products

under the Saffola brand. The company has expanded the Saffola franchise by launching

Saffola Oats (prototyped in Maharashtra). During Q4FY10, Saffola Arise was launched

across key Saffola markets. It is a low Glycomic-Index (GI) rice that helps in weight

management.

Other brands:Marico is present in hair cream and hair gel market through ParachuteAdvansed hair creams and hair gels with a market share of approximately 27% at the end of

March 2011. The company dominates the anti-lice treatment product market in India

through its brand Mediker which has a market share of approximately 96%. Revive is a

liquid fabric whitener for washing clothes and the company has a market share of

approximately 80% in this category.

May 23, 201

A C Choksi

Domestic Business Brands

Parachute, Oil Of Malabar, Nihar Coconut Oil 53

Hair Oil (Hair & Car e, Parachute

Jasmine, Pa rachute Advansed ,

Hair Oils 23

Shanti A mla, N ihar)

Saffola Super Premium Refined

Safflower oil

53

Mediker Anti-lice Treatment 96

Revive Instant fabric starch 80Source: Company

Market share

range %Category

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Consumer Products Business (International):

Marico has flourishing international presence in Middle East, Bangladesh, Egypt, SouthAfrica, Malaysia and Vietnam. Over the past four years, the international business revenue

has increased at a CAGR of 36% while the contribution to sales has increased from 13% in

FY 2007 to 23% in FY 2011. Parachute is the largest selling coconut oil brand in

Bangladesh and Marico has successfully doubled its market share in eight years from 36%

in FY 2003 to approximately 80% in FY 2011. The company has a strong distribution

network in Bangladesh with approximately 300,000 outlets. Leveraging upon the extensive

distribution network created by Parachute, the company introduced an Egyptian brand

Hair Code hair dye in Bangladesh. Hair Code has achieved about 29% value market share

thus establishing itself as a strong number 2 player. In addition to this, Marico had alsolaunched Saffola oil in Bangladesh during FY 2011 which is gaining traction in the market.

Marico operates in the Middle East through its subsidiaries, Marico Middle East FZE and

Kaya Skin Care FZE and its product portfolio comprises of Parachute coconut oil and

Parachute hair creams and gels. Marico entered the South African market in FY 2008

through the acquisition of Enaleni's consumer brands. The company commands a market

share of approximately 60% in the hair care category in Egypt through its Fiance and Hair

Code brands.

May 23, 201

Kaya:

Marico offers hair care and skin care services through a chain of clinics under the brand

name Kaya. At present, there are a total of 103 clinics with 81 situated in India, 16 in the

Middle East, 2 in Bangladesh in addition to the 4 clinics and medi-spas in Singapore and

Malaysia through Derma Rx.

A C Choksi

International Category Products

Bangladesh Coconut Oil,Edible oil &

Hair care

Parachute oil, Saffola, Hair

Code

South Afr ica Hair care and Heal th care Caivi l, Black Chic, Hercules,

Ingwe

Egypt Hair care Fiancee and Hair Code

Middle East Skin Care Parachute cream & Gels

Malaysia Hair care Code 10

Vietnam Pe rsonal car e, Home Care

& Foods

X-Men, L'Ovita, Thuan Phat

Food

Source: Company

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2)Urbanization to contribute in future growth of the economy

Urbanization is a key indicator of economic development of a country. With

economic expansion, its towns and cities expand in size and volume and the

contribution of the urban sector to the national economy increases. Urban India is

undergoing a deep transition phase in terms of physical form, demographic profile

and socio-economic diversity. The rate of urban growth in the country is very high as

compared to developed countries, and the large cities are becoming larger mostly due

to continuous migration of population to these cities.Urban population of India is expected to reach 433mn by 2021, while the total

population may reach 1340mn (Source: Registrar General, Government of India).

Thus, the level of urbanization in the country in the year 2021 is expected to be about

32%.

May 23, 201

Urbanization

Source : Registrar General, Government of India

By 2021, the contribution of urban sector to GDP will grow to 75% from current

62% levels. During last decade, aggregate urban consumption has grown by 6.2%

outpacing GDP growth. Going forward, urban consumption is expected to grow at a

CAGR of 9.4% over the next 20 years (Source: Mckinsey). Thus, average annual

spending per urban Indian household will more than triple in 2025.

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Source: Government of India

May 23, 201

Aggregate Urban ConsumptionContribution of Urban sector to GDP

Source: Planning Commission Source: Mckinsey

3)Rising income levels and increasing discretionary spends reflects improving

lifestyle

Since 1996, India's consumption pattern saw a major shift from food consumption

to non-food consumption, which includes health, hospitality and educational

spending. This scenario was the same with both rural and urban India's population.

Non food consumption for the cities, in particular is contributing much more than

food consumption to the total expenditure. Rising income levels will bring more and

more urban population aware towards health and wellness.

Declining trend in food related consumption indicating lifestyle changes

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Health Care

Saffola to remain on a high growth path

Increasing Cardiovascular Cases in India will make people shift toward

healthy oils

Saffola is a forty year-old brand and one of the major revenue drivers for Marico. The

brand is positioned in a niche category of 'good for Heart' platform to tap the health

conscious Indian consumers and therefore offers higher realizations than other edible

oils. As Marico targets health conscious consumers in the country, increasing

awareness over cardiac problems, coupled with rising incomes, will lead to strong

growth in Saffola, going forward. The consistent launch of innovative edible oil

variants and functional foods under the brand is expected to further suppor t growth

under the Saffola franchise.

Starting from a level of about 380 lakh cases in the year 2005, there may be as many as

641 lakh cases of cardiovascular disease (CVD) in 2015. The rates of prevalence of

CVD in rural populations will be lower than in urban populations, but will continue to

increase, reaching roughly 13.5% of the rural population in the age group of 60-69

years by 2015. The prevalence rates among younger adults and women (in the age groupof 40 years and above) are also likely to increase. With rising aspirations and increasing

stress levels, India will see a major number of CVD cases in the bracket of working age

population. It is estimated that 82% of total CVD cases will be witnessed in the age

bracket of 20-59. We believe the steady rise in the awareness towards healthy lifestyle

will attract more and more consumers toward Saffola brand.

May 23, 201

A C Choksi

Burden of cardiovascular diseases in India

Source : NHFCA

Marico emerges

as a keybeneficiary of

urbanization and

ising income

evels in rural

and middle class

households due

o its niche

positioning in

Health care and

Hair Care space

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Nurturing Wealth


Presence across price points expands market reach:

Leveraging on the success of the Saffola brand, Marico launched 3 blends; Saffola

Tasty Blend (corn oil & safflower oil ), Saffola Gold (80% rice bran oil and 20%

safflower) and Saffola Active (rice bran & soya oil). Saffola has grown at a healthy rate

over the past several years, driven by changing consumer preference for branded oils.

These variants fill the gap between premium category Saffola oil and regular edible oils.

Hence, it taps the customers who wish to choose healthy refined oil but were not able to

do so because of high premium of Saffola oil over regular edible oils. This expands

market reach of the Saffola brand to middle class and aspiring customers. This strategy

to expand product basket across various price points entail dual benefit for the

company, as rising income levels make customers to uptrade to high-margin premium

product. On the other hand, during rising inflation when consumers tend to

downtrade, offerings across various price points helps Marico to retain market share.

May 23, 201

A C Choksi

Prices of Saffola's various brands


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Brand Extension: Entry in high growth, nascent categories with a niche o

health positioning

Saffola's success reflects brand power of Marico:

Saffolas Outlook:

With evolving tastes and consumer preferences, Marico has exploited available

opportunities by prototyping products using its existing flagship brands. The company

launched a number of health conscious products under the Saffola brand. The

company has expanded the Saffola franchise by launching Saffola Oats (prototyped in

Maharashtra). The Oats market in India is approximately Rs 1200-1400mn and is

growing fast at a rate of approximately 40%. While the category has seen the recent

entry of a few players, the nascent market and healthy trend provides room for all

players to participate in this category growth. Saffola will also play a role in expanding

the market. During Q4FY10, Saffola Arise was launched across key Saffola markets.

The performance so far has been encouraging in the West & South India markets where

short grain rice is common. During Q4FY11 two more variants in Basmati and long

grain rice were introduced to strengthen the position in the North where the longer

grain is preferred. The packaged rice market in India is approximately Rs 4000mn and is

growing at over 20%. With its innovative health positioning Saffola is likely to create a

sizable franchise for itself over the next two to three years.

Saffola consistently maintained double digit volume growth since FY 2004 on account

of huge branding and creating a different category of consumer which is urban and

focused towards the heart related issues such as cholesterol. Though caters to a very

niche but high income group of population, Saffola maintained its market share over

15%. The brand witnessed major competition from Agro Tech Food's Sundrop brand

which was also categorized in the same niche. During FY 2005-10, Saffola's volume

registered a CAGR of 15% while its revenues reported a CAGR of 18%. Going

forward, we expect that strong demographics of India and Marico's increasing focus on

Saffola will help to improve its contribution to business. In our view, Saffola will be amajor growth driver for Marico and its volume and value growth will register a CAGR

of 17.5% and 24.5% respectively during FY 2011-14.

During FY 2011, Rice bran prices registered a significant increase of approximately

21% whereas safflower prices remained flat. To factor in the impact of the same the

company had taken a blended price increase of approximately 12% during the year.

Going forward, we expect an increase in safflower prices as during the current crop

May 23, 201

A C Choksi

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Source: A C Choksi Institutional Research

Saffola's Gross blended realization Growth

May 23, 201

Raw Material Prices

Kardi Oil Rice Bran Oil

Source : A C Choksi Institutional Research

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Supply Side Hedge:

Skewed urbanization in India became favorable for Marico:

Safflower cultivation in India is continuously declining over the last 10 years, and hasdeclined by 64% since 1991. Production has also declined by 41% during the same

period. Major reasons for decline in area and production of safflower are higher

remuneration from competing crops such as sorghum and gram and low price

realization for the farmers as compared to other oilseed crops.

Marico is the major procurer of safflower in India. However, Marico's continuous

thrust on product improvisation had reduced the supply side constraint as the company

had chosen to offer blended oils rather than pure safflower oils. Incorporation of rice

bran oil in its edible oil portfol io provides multiple benefits to the company, as 1) withCholesterol lowering property rice bran oil has the ideal SFA/MUFA/PUFA ratio

which is the closest to WHO recommendation as compared to other edible oils; hence it

gels well with the Marico's Healthy Edible Oil strategy; 2) rice

bran oil production in India is increasing consistently, thus it hedges Marico against

supply side hiccups; 3) price of rice bran oil is low as compared to safflower oil prices;

this facilitates Marico to offer healthy oils at lower price points while maintaining its

margins.

Several states in India are at a low level of urbanization, in that they have not attained

even the 1951 national level of urbanization. These are Assam, Bihar, Himachal

Pradesh, and Orissa. Uttar Pradesh and Chhattisgarh are still to cross the 1971 national

level of urbanization (Source: Registrar General, Government of India). Marico

generates approximately 60% of its revenue from South and West regions, which are

developing fast and with strong distribution network in place it provides an

opportunity to expand its Health care brand in these regions rapidly.

May 23, 201

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Hair Care

Hair Oil Industry; growing at par with FMCG Industry Average:

Parachute-well oiled for a high growth stride:

Hair care products contribute approximately 8% of the total FMCG market (Rs

1611bn) in India (Source: A C Nielsen). Hair care industry is growing at par with overall

industry average of approximately 13-14%. Shampoo and hair oils, including coconut

oils, continue to be the key components of this segment. Hair oils category constitute

more than 55% of the overall hair care industry in India. Hair oil category witnessed a

volume growth of 17% CAGR from FY 2007 to FY 2010 whereas it witnessed value

growth of 21% CAGR over the same period. This growth is primarily attributed to the

improvement in distribution network and supply chain efficiency.

Marico is the market leader in the coconut oil (CNO) market in India through its

flagship brand Parachute. Market size of branded coconut oil in India is

approximately Rs 19bn. In light of growing urbanization and increasing affordability,

customers are becoming more brand conscious. Marico is well-positioned to become

the key beneficiary of changing preferences of Indian consumers as there exists a large

headroom for growth with 40% market share of total CNO market with unorganized

players. To exploit this untapped market, Marico has launched packs at low price points

in order to facilitate the conversion of loose oil users of coconut oil to Parachute.

During, rising input cost scenario the company had restrained from increasing prices at

lower price points. The company has clear-cut growth strategy in place to expand in hair

care segment 1) expanding profitability in coconut oil segment, where it enjoys high

pricing power; 2) to expand its hair care basket by launching new product variants under

its flagship brand Parachute (only in the product categories where it can achieve

dominant market share). Thus, the company has strategically decided not to focus on

niche markets like shampoo and hair-colorant due to high competitive intensity in the

categories. We believe pricing power, better product portfolio and favorable

competition dynamics will drive growth momentum in the hair care space.

May 23, 201

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Opportunity in South India:

From the following chart we can depict that South India is still not a huge market forlight hair oils and is a major consumer of coconut oil. Thus, Marico, which has a strong

distribution network in South India, with its Parachute brand in pure CNO category

and coconut oil based variants has an edge over its competitors in the region.

With rising rural penetration Marico taps unbranded CNO market:

Rural sales comprised about 27% of the company's Indian FMCG sales during FY 2011

as compared to 25% in FY 2010. Marico has taken initiatives to drive greater rural

penetration over the last two years or so. It has endeavored to reach a larger number of

retail outlets in the rural market directly through its distributor sales force rather than

depending on wholesalers to service these outlets. This has improved the quality of the

sales call and provides the opportunity to sell-in a wider range of products. In recent

times, the sales reach has increased largely on the back of penetrative pricing in Shanti

Amla and lower price point packs in Parachute. Going forward, we expect that Marico's

traction in rural market will improve, driven by: 1) better distribution reach; 2)

availability of branded products at low price points; and 3) strong growth in rural

income led by continued stimulus to the rural economy from higher National Rural

Employment Guarantee Act allocation.

May 23, 201

A C Choksi

Region-wise break up of Light hair oil Industry in India

Source: A C Nielsen

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CNO Category's Outlook:

During FY 2011, Copra prices registered a significant increase of approximately 45%owing to decline in copra production in India (due to unseasonal rains in Tamil Nadu

and Kerala) and increase in copra exports (India's coconut exports have increased by

approximately 30% in FY 2011, triggered by the export ban on shipments of the

produce of Sri Lanka). To factor in the impact of the same the company had taken a

price increase of approximately 32% during the year. Out of these 32% the company

had taken price increase of approximately 8% during Jan 2011, the impact of which will

be visible in FY 2012. If company wants to maintain its margins in CNO segment then

for every 2% increase in copra the company has to increase CNO prices by 1%. During

the current crop season, copra production is likely to decline by approximately 2% y-o-

y (Source: COOIT) whereas as per our channel checks copra exports are expected to

remain robust. Thus, we anticipate that copra prices will increase by approximately

20% during FY 2012. As company had already taken price increase of 8% during Jan

2011, the impact of which will be visible in FY 2012, we have factored in an increase of

3% in blended realizations during FY 2012. We believe that, minimal price increase

during FY 2012, will lead to volume growth of 8% during the year. This will result into a

value growth of approximately 11% during FY 2012.

May 23, 201

A C Choksi

Volume Growth in CNO category Blended Realizations Growth in CNO

Source : A C Choksi Institutional Research

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A C Choksi

Copra Prices


Hair oils; Expanding franchise:

Marico's hair oil portfolio has indicative market share of 23% with Dabur leading the

space. Major competitors for Marico in this segment are Keo Karpin, Dabur Amla,Vatika hair oil and Bajaj Almond drops. The company continuously engages in

prototyping and introducing various product variants as per the requirement of the

customers. For example, the company has started promoting sticky coconut oil as pre-

wash oil and non-sticky oils as post-wash. It has also launched Parachute Therapy

which is specially designed to control hair fall. Further, the company is prototyping

coconut based cooling oil in Andhra Pradesh which is gaining traction in the region.

Hence, with continuous value addition Marico is becoming one-stop-solution-

provider for the customers and hence has an edge over its competitors. Light hair oil

and Amla Hair oil is an urban dominated segment due to its comparatively high cost.

With well placed distribution network Marico is all set to tap the benefit of rapid

urbanization in India in Hair care category. The value added hair oils category

(including Nihar) contributed approximately 17% to total revenues of Marico in FY

2011 and is expected to register a steady growth of 28.3% CAGR during the period FY

2011-2014E.

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Divestment of Sweekar Brand to improve profitability:

Kaya's turnaround; Acquisition of Derma Rx to improve profitability:

In March 2011, Marico divested its refined sunflower oil brand Sweekar to Cargill

India private Limited (Cargill) for a consideration of Rs 500mn. Sweekar was

contributing approximately 5.1% of total sales of the company. Sweekar's low pricing

power and single-digit operating margin were a drag on Marico's overall profitability.

Hence, this divestment was in line with the company's strategy of focusing on Saffola as

its wellness platform in the refined edible oi ls and functional foods space. We believe,

this divestment will lead to marginal improvement in profitability of the company.

However, this improvement in margins will be offset by increase in ad-spends during

FY 2012. During FY 2011, Marico had slashed its ad-spends significantly, in order to

retain its operating margins. However, as this is not a common phenomenon, we believe

that the company will restore its regular ad-spend ratio during FY 2012 to give a thrust

to its volume growth. Thus, impact of divestment of low-margin business will be

visible from FY 2013.

Marico ventured into skin care and wellness business in 2002 through its wholly-owned

subsidiary Kaya Skin Care, which operated with 103 clinics at the end of FY 2011. Out

of 103 clinics, 81 are located in India, 16 in the Middle East, 2 in Bangladesh in addition

to the 4 clinics and medispas in Singapore and Malaysia through Derma Rx.

Although Kaya is based on a unique business model, offering a range of skin care

services and products, it grew at lower than expected rate, primarily due to low client

May 23, 201

A C Choksi

Volume growth in Hair Oil category Value growth in Hair Oil category


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retention, introduction of service tax, higher attrition of the skin practitioners and

curtailment on discretionary spending by customers during an economic slowdown.

Marico is taking various steps for Kaya's turn around:

Marico is focusing on various training sessions for its

skin practitioners which helped the company to reduce attrition rate from

approximately 50% to 35%.

Earlier, Kaya had

been perceived as a Solution for Skin Problems. However, this resulted into a

perception of that repeat visits are unnecessary and high-priced solutions also

proved detrimental to the growth. Thus to tackle this problem and to encouragerepeat visits, Kaya introduced services priced at Rs. 990 for a single session. These

were accompanied by easy upgradable offers.

Marico had acquired Singapore based Derma Rx in

May 2010. The company is banking upon the product portfolio of Derma Rx to

improve margins as Derma Rx is a highly profitable business. The company had

recently launched Derma Rx products in Kaya Skin Clinics in India and contribution

of product sales in overall Kaya revenues increased from 13% in FY 2010 to 17% in

Q4FY11. This is in line with the company's strategy to increase the share of

products to about 20%-22% in the next 2 years. The company will continue to

introduce more products in India in a phased manner. Derma Rx products are in the

process of being introduced in the Middle East too.

We believe the company will open four new clinics in FY

2012 and two clinics in FY 2013 in the Middle East region.

During FY 2011, Kaya's revenues (excluding of Derma Rx) increased 7% y-o-y to Rs

1947mn. Derma Rx registered revenues of approximately Rs. 442.6mn sinceacquisition. Going forward, we believe that the division will grow at a CAGR of

15.9% between 2011 and 2014.

Decline in Attrition rate:

Introduction of low-cost services requiring repeat visits:

Acquisition of Derma Rx will lead to reduction in losses and eventually

improve Kaya's profitability:

International expansion:

May 23, 201

A C Choksi

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A C Choksi

International Business Group (IBG) to witness rapid growth:

Bangladesh:

The IBG currently contributes approximately 23% of the total revenue and has been

growing at a CAGR of approximately 36% over the past 4 years. Going forward, we

expect the IBG to grow at CAGR of 21.5% between 2011 and 2014 and by FY14 it is

expected to contribute 25 - 26% of the total revenue.

During past couple of years, Marico had been very aggressive in terms of acquisitions.

The company has consciously followed the strategy to invest in the brands that have

high synergies with its existing product portfolio. These brands are well established and

enjoy considerable market share in the respective markets. With a reasonably largeproduct portfolio, the company is focusing on cross region marketing of the products

which wil l result into revenue growth of the product, optimum utilization of the

distribution network and better economies of scale which will lead to improvement in

IBG margins.

Revenue growth in Bangladesh will be supported by continuous

growth in parachute coconut oil by encouraging conversions from loose mustard

and coconut oil. Parachute has a volume market share of approximately 80% in

Bangladesh. The Company is leveraging on its extensive distribution network ofapproximately 300,000 outlets by launching its International Brands in Bangladesh.

The company had launched Egyptian Hair Dye brand Hair Code in FY09 and

Domestic Flagship brand Saffola in FY 2011. Hair Code has achieved about 29%

value market share whereas Saffola refined edible oil is continuously gaining

traction. Thus, we believe that the company is well poised to grow at a steady pace in

Bangladesh driven by strong growth in new categories that complement the growth

of the flagship brand, Parachute.

Kaya's Revenue S tructure

A ll figu re s in R s m n, u nles s

specified

FY 20 08 FY 20 10 FY 2 011 FY 2 012 E FY 2 013E FY 20 14E

Kaya:

Av era ge Foo tfa ll 30 32 33 35 37 40

Tic ket S ize (R s) 1 ,500 1,6 00 1 ,650 1 ,683 1,71 7 1, 751

Worki ng day s in a year 350 350 350 35 0 35 0 35 0

No. of clinic s 65 101 103 110 116 121

Total R evenu es 1,8 20 1,9 47 2 ,77 5 3,2 61 3,7 92

-Service Revenues 1 ,017 1,583 1 ,589 2 ,270 2,612 2,974

-Product Revenues 237 359 506 648 818

Derma Rx: 443 550 578 606

Source: Company data, AC Cho ksi Institutional Research

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Middle East and North Africa (MENA): During FY 2011, the company

registered almost flat growth in MENA region primarily due to the civil unrest

witnessed in the region during fourth quarter. Marico has created a manufacturing

hub for MENA in Egypt. The supply chain was adversely impacted for about 5-6

weeks. Although this has stabilized towards the end of the quarter, the company is

working on alternative sourcing options in order to de-risk its supply chain

operations. We remain cautious for the near term performance in the region. Thus,

we project a f lat growth in the region during FY12. However, our outlook on the

long term trends in demand for personal care products in the region remains

positive. Rapid urbanization and the rise of middle-class African consumer are the

major growth drivers. In 1980, just 28% of Africans lived in cities while urbanizationincreased to 40% by 2008. Thus, we believe that rapid urbanization and rising

disposable income will increase penetration and market size of the hair care and skin

care industry in the region.

May 23, 201

A C Choksi

More than half of African households will have discretionary spending power by 2020

Source : Mckinsey

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South Africa:

Acquisition of Ingwe:

Malaysia:

Vietnam:

The South African business registered a growth of approximately

33% y-o-y during FY 2011, aided by the acquisition of Ingwe (discussed later). The

organic growth during the year was 24%. The company is present with its Caivil,

Black Chic (Hair care) and Hercules (Health care) brands in the region.

Marico had acquired OTC health care brand 'Ingwe' from

Guideline Trading CC of South Africa through its subsidiary Marico South Africa

Ltd (MSA). Ingwe is a leading healthcare brand in South Africa and has a range of

products catering to immunity booster. The products compliments to one of the

Marico's brand Hercules in South Africa. The Ingwe brand had a turnover of Rs

150mn in FY 2010. Further, Ingwe has a strong distribution channel which will help

the company to distribute its existing product range in South Africa. With this

acquisition, company has strengthened its health care presence in South Africa.

Going forward, the company will focus on increasing market share in key categories

in South Africa and eventually it will expand its footprint to other parts of sub-

Saharan Africa. Thus, revenues from South Africa are expected to grow 35.7% y-o-y

during FY 2012 driven by the growth in hair care and healthcare market in the region.

Marico entered the Malaysian hair cream and hair gels market through

the acquisition of Code 10 from Colgate Palmolive in January 2010. The hair stylingmarket in Malaysia is in excess of Rs 2000mn, with Code 10 being the third-largest

player in the segment with a market share of 10%. The company had finished

integration exercise of distribution and manufacturing transition during FY 2011.

Going forward, we believe that the company will register a revenue growth at CAGR

of 22.6% between FY 2011 and FY 2014, in Malaysia.

Marico increased its presence in the South East Asian market by taking up

85% equity in International Consumer Products Corporation (ICP), a leading hair-

care company in Vietnam. ICP focuses on hair care, with its brands X-Men (with a

35% market share in men's shampoos) and L'Ovite (focused on personal care).

Other products under the X-Men brand are conditioners and hair styling products.

20% of ICP's revenues come from food products under the Thuan Phat brand. The

acquisition was funded entirely through debt (ECBs at Libor+300bps). Going

forward, the Company is likely to focus on the process of integration. ICP is

expected to contribute approximately 2.6% to total revenues in FY 2012. However,

its contribution in margins is expected to remain modest owing to the conscious

strategy of higher investments in advertising during the year.

May 23, 201

A C Choksi

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Overall portfolio to showcase steady growth:

We expect market share of Parachute to increase going forward driven by its strong

brand positioning and loose oil consumers switching to branded products. Further,

Saffola is also expected to have a larger share in edible oil market due to its well

established brand equity and continuous efforts to launch new variants at different

price levels to cater to a larger group of population. Restructuring of Kaya will further

boost its top-line. Hence, with a nice blend of geographical and product

diversification, Marico is well on track for a steady revenue growth momentum. Going

forward, we expect the CNO category to register an 11% CAGR growth in revenuesover FY 2011-14E supported by strong pricing power, increasing traction in rural

market and favorable competition dynamics. In addition, we expect the Saffola

brand to register a 24.5% CAGR growth in revenues over FY2011-14E supported by

changing preference for healthier foods and higher brand investments going forward.

Hair Oil category is expected to register a steady growth of 28.3% CAGR during the

period FY2011-2014E. In addition, IBG is expected to grow at a CAGR of 21.5%

between 2011 and 2014. Thus, overall revenues of the company are expected to grow at

3-year CAGR of 18.5% by FY 2014.

May 23, 201

A C Choksi

Financial Projections

Revenue & Revenue growth

Source: Company, AC Choksi Institutional Research

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Capex Breakdown :

The capex planned by the company pertains to the expansion of Kaya clinicsmaintenance capex, and capacity expansion of its hair care and edible oil plants. We

expect the company to open 18 new Kaya clinics till FY 2014 with a capex of Rs 12mn

for each clinic with maintenance capex of Rs 400mn per year. As the company is

expanding its reach in domestic as well as international markets, we expect capex of R

250mn-300mn p.a. for capacity expansion.

May 23, 201

Balance Sheet un-leveraging to improve return on capital employed :

Marico had been on an acquisition spree in the recent past, to expand in domestic as

well as international markets. Most of the capex for acquisit ion was funded through

borrowings leveraging the balance sheet of the company. Marico's borrowings at the

end of FY 2011 stand at Rs 7,718.2mn comprising of Rs 5,540mn of US$ denominated

loans. Rs 2,200mn of US$ denominated debt is repayable with in a period of one year

Further, during FY 2012 Rs. 1,680mn of rupee denominated debt will become

repayable. With an underlying assumption that the company will roll over some of the

debt and there will be no further big ticket acquisition, we expect the company will

reduce its debt base by paying off Rs. 2,683mn during FY 2012. As un-leveraging

process continues, it will reduce the risk on Marico and positively impact the return on

capital employed.

A C Choksi

Capex Breakdown*A ll figure s in Rs m n FY 2 012E FY 2013E FY 2014 E

Kaya

No. of new clinics 7 6 5Capex per c linic 12 12 12

Tota l capex fo r K aya 84 72 60

Maintenance Capex 400 400 400

Other Capex 300 250 250

Tota l Cape x 7 84 7 22 710

Source: Company , AC Choksi Institu tional R esearch

*Assuming no significant acquisitio n

Debt run off schedule

All figures in Rs m n FY 2 01 2E FY 20 13E FY 20 14E

Current debt 7 ,718 5,036 2,784

Repayment of debt 2 ,682 2,253 1,649

Debt a t the end of the yea r 5 ,036 2,784 1,135Source: Company, AC Choksi Institutio nal Research

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Working Capital Cycle :

Going forward, we expect the trade account receivable days to increase graduallyprimarily due to the increase in the proportion of international business, where average

receivable days are higher. On the other hand, inventory days are expected to decline

going forward, as exceptionally high raw material cost scenario seems to be over which

will lead to a decline in raw material posit ion building. Further, copra procurement via

contract farming will ensure steady supply of throughout the year. Further, we expec

trade account payable days will increase going forward with the increasing share of

modern trade in the retail business. As modern trade is a very thin margin business, we

expect the retailers to negotiate for prolonging credit terms.

May 23, 201

A C Choksi

Investment Concerns

Raw material availability and seasonality:

Higher excise tax on CNO category:

Marico's key raw materials include copra, kardi oil, sunflower oil, corn oil and rice bran

oil which are commodity crops whose availability is seasonal. Any short fall in supply

due to disruption in seasonality of these raw materials could adversely impact

company's operations. During FY 2011, higher crude, copra, rice bran and other edible

oil prices, pressurized volumes/margins across the board. We have factored in an

increase in raw materials in our estimates. However, if raw material prices increases

more than that, it may adversely affect Marico by either affecting margins or volumes

This will lead to deviation from our estimates.

Coconut oil was categorised as edible oil and hence was not subject to excise duty.

However, in a 3 June 2009 circular, Parachute in containers of up to 200ml wasclassified as hair oil and hence subject to an excise tax of 10.2% less abatement (that is, a

6.63% tax). Marico had created a provision for the same till FY 2010. However, during

FY 2011 Marico has reversed its provisions made in lieu of excise obligations as per

AS(29.) If the outcome of the ongoing litigation is unfavourable for the company it

will lead to contingent liabil ity.

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Unrest in MENA:

Slowdown in consumer spending:

Further big ticket acquisition:

Currency risk:

Marico derives approximately 9-10% of its revenue from the MENA region. It ha

three factories producing consumer goods for this region. Although we have factored

in the impact of civil unrest in our estimates, if it stretches for more-than-expected

period it will lead to higher-than-expected decline in sales growth.

During macro-economic slowdown and rising inflation consumers tend to reduce

spending by down trading. Considering Marico's premium priced flagship products, a

slowdown in consumer spending would be a risk to our earnings estimates and targeprice.

Marico was on acquisition spree in the recent past which resulted into leveraging it

balance sheet significantly. Thus, any further large acquisition done by increasing

leverage will impact the balance sheet and return ratios of the company.

Marico derives approximately 23% of its revenues from International business

However, we have not forecast the impact of currency fluctuations for our estimates, a

we presume a constant currency exchange rate when forecasting. Therefore any

significant currency fluctuation may impact our revenue estimates. Any further

expansion into new geographies and undertaking of new projects exposes the

company to additional foreign currency risks.

May 23, 201

A C Choksi

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Valuations:

In our DCF model we have derived explicit free cash f low projections till FY 2014 after

which we have assumed a terminal value. Based on a WACC of 9.65% and a perpetua

growth rate of 5% we arrive at a DCF fair value of Rs 158 for the Marico.

May 23, 201

A C Choksi

All figures in Rs mn FY 2010A FY 2011A FY 2012E FY 2013E FY 2014E

EBIT 3,334 3,669 4,481 5,650 7,253

NOPLAT 2,690 2,819 3,724 4,633 5,851Depreciation 601 708 752 748 743

Change in working capital 1,063 1,153 637 788 857

Capex 1,564 1,921 784 722 710Free cash flow 664 453 3,055 3,871 5,027

Free Cash flow analysis

Source: Company , AC Choksi Institutional Research DCF sensitivity analysis

Terminal growth rate

158.0 3.00% 4.00% 5.00% 6.00% 7.00%

8.65% 133.9 160.6 202.0 274.8 435.8

9.15% 122.8 144.7 177.3 230.7 333.7

WACC 9.65% 113.3 131.7 158.0 198.7 270.2

10.15% 105.2 120.7 142.4 174.4 226.810.65% 98.1 111.4 129.5 155.4 195.4


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FINANCIALS (Consolidated)

May 23, 201

A C Choksi

INCOME STATEMENT

Particulars (Rs. Mn) FY10 FY11A* FY12E FY13E FY14E

Revenues-CPD 25 ,011 29 ,186 34,625 41,169 48,877

Excise Duty 11 12 14 16 20

Net Revenues-CPD 25 ,001 29 ,174 34,611 41,152 48,857

Income from serv ices 1 ,607 2 ,109 2,474 2,851 3,264

Total Sa le s and Serv ices 26 ,60 8 31 ,28 3 37, 08 5 44, 003 52, 121

Other Income 183 279 298 313 329

Tota l Revenu e 26 ,790 31,562 37 ,383 44 ,317 52,450

Cost of goods sold 16 ,590 20 ,900 24,406 28,669 33,315

Gross profit 10 ,201 10 ,662 12 ,977 15,647 19 ,135

Gross p rofit Ma rgin 38.1% 33.8% 34.7% 35 .3% 36 .5%

Selling, Gen & Adm Expenses 2 ,755 2 ,825 3,361 4,001 4,760

Ad. & Sa le s Promot io n 3 ,51 1 3 ,46 0 4, 38 3 5, 249 6, 378

EBITDA 3,934 4 ,377 5 ,232 6,397 7,996

EBITDA Mar gin 14. 7% 13. 9% 14. 0% 14 .4 % 15 .2%

Depreciation & Amortization 601 708 752 748 743

EBIT 3,334 3 ,669 4,481 5,650 7,253

EBIT Ma rgin 12. 4% 11. 6% 12. 0% 12 .7 % 13 .8%

Finance Charges, Net 257 393 277 153 62

Exceptional Items 98 (489) - - -

Net Incom e Before T axes 2 ,979 3 ,764 4 ,204 5,496 7,191

Provision for Income Taxes 643 850 757 1,017 1,402

Repor ted N et Incom e 2,317 2 ,864 3 ,446 4,479 5,788PA T Ma rgin 8.6% 9.1% 9.2% 10 .1% 11 .0%

Adju sted N et Income 2,415 2 ,375 3 ,446 4,47 9 5,788

Dividends 402 406 412 418 424

Dividend Tax 70 69 70 71 72

*Provisional

Source: Co mpany, A C Choksi Institutional Research

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BALANCE SHEET

Particulars (Rs. Mn) FY10 FY11A * FY 12E FY13E FY14E

Cash a nd cash equivalents 1 ,115 2 ,131 1 ,544 2,551 5,390

Tra de a ccounts rece iv ab le 1 ,5 07 1 ,88 0 2 ,22 8 2, 66 1 3,172

Inventories 4 ,448 6 ,011 6 ,553 7,462 8,397

Loans and Advances 1 ,900 2 ,061 2 ,429 2,860 3,362

Total c urren t assets 8 ,970 12 ,082 12 ,755 15,534 20,3 22

Net property 2 ,868 4 ,081 4 ,113 4,088 4,055

Goodwill 850 3 ,976 3 ,881 3,786 3,691Investments 827 892 892 892 892

Capital WIP 1 ,129 816 823 818 811

Deffered Tax a ssets 616 301 371 440 521

Other non-current a ssets 0.10 - - - -

Total non-c urrent a ss ets 6 ,291 10 ,066 10 ,079 10,023 9,9 70

Total asse ts 15 ,260 22,14 8 22 ,834 25,55 6 30 ,291

Sundry Creditors 3 ,096 4 ,132 4 ,948 5,891 6,937

Uncla imed Div idend 2 2 3 3 3Other Liability 233 256 282 310 341

Security Deposit 11 11 11 11 11

Interest Accrued 24 - - - -

Provisions 768 652 433 447 461

Uncla imed Pref. Share Capita l 0 .3 0 .3 0 .3 0.3 0.3

Bank Overdra ft 3 3 3 3 3

Total c urren t liabilities 4 ,136 5 ,057 5 ,679 6,66 4 7,7 56

Long te rm debt 4 ,459 7 ,718 5 ,036 2,784 1,135

Othe r long te rm liabilities - - - - -Total lon g term liabilities 4 ,459 7,71 8 5 ,036 2,78 4 1,135

Minority Interest 125 219 - - -

Shareholders' equity 6 ,540 9 ,155 12 ,119 16,109 21,400

Total liabilities and equ ity 15 ,260 22,14 8 22 ,834 25,55 6 30 ,291

*Provisional

Source: Co mpany, A C Choksi Institutional Research

A C Choksi

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Nurturing Wealth


CASH F LOW STATEMENT

P articu lar s (Rs. Mn) FY 10 A FY 11A * FY12E FY 13 E F Y14 E

Net income (loss) be fore taxes 2 ,979 2 ,864 3,4 46 4 ,479 5 ,788

O pe rating profit be fore work ing c apital chang es 3 ,97 7 3 ,57 2 4,19 8 5 ,22 6 6 ,53 0

(Increase)/Decrease in Current Asse ts (1 968) (2097) (12 59) (1 772) (1949)

Increase/(Decrea se) in Current Liabi litie s 681 944 6 22 985 1092

C ash gene rated from ope rations 2 69 0 242 0 35 61 4 43 9 567 3

Tax Paid (629) - - - -

N et cash from operating ac tivities 2 06 1 242 0 35 61 4 43 9 567 3

C ash flow from investing activities

Purchase & Sa le of f ixed asset s (1 487) (1609) (7 90) (717) (703)

Puchase & Sale of Investment s (706) (64) - - -

Deffered ta x a sse ts - 315 (70) (69) (81)

Interest/Div. Income 25 - - - -

Interest Income/accrued 94 (24) - - -

Goodwi ll on Consolidat ion - (3126) 95 95 95

Minority Interest - 9 3 (2 19) - -

N et cash use d in inve sting a ctivities (2 07 4) (4414) (98 4) (69 1) (69 0)

C ash flows from financing a ctivities

Proceeds from the is sue of sha re capital 218 5 - - -

Reserves - 219.89 - - -

Proceeds a nd Repayment of borrowing 1 001 3259 (26 82) (2 253) (1649)

InterCorpora te deposit s taken / (repaid) (50) - - - -

F inance Charges (272) - - - -

Dividend & Dividend dist. Ta x Paid (472) (474) (4 82) (489) (496)

Unclaimed Dividend Pa id 0.1 0 .1 0 .1 0.1 0 .0

N et Cash from fina ncing ac tivities 28 1 3010 (316 3) (2 74 1) (214 4)

Increase/Decrease in ca sh and ca sh equ iva lents 229 1 ,016 (586) 1 ,006 2 ,839Cash and c ash equiv alents at the beginning 883 1 ,112 2,1 28 1 ,542 2 ,548

C ash and cash e qu iva lents a t the end 1,112 2 ,12 8 1,54 2 2 ,54 8 5 ,38 7

*Provisional

Source: C om pany, A C Chok si Institutional Research

A C Choksi

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RATIOS

Particulars (Rs. M n) FY10 FY11A* FY12E FY13E FY14E

Growth (%)

Gross sa le s 11 .1% 16.7% 18.6% 18.9% 18 .7%

Tota l sa le s 11 .4 % 17 .6% 18. 5% 18. 7% 18 .4 %

EBITDA 24 .4% 11.2% 19.6% 22.3% 25 .0%

Net profits 22 .8% 23.6% 20.3% 30.0% 29 .2%

Per Share

Earnings (Rs) 3 .80 4 .66 5.61 7.29 9 .42

Dividends 0 .66 0 .66 0.67 0.68 0 .69

Book va lue 10 .73 14 .90 19.72 26.22 34 .83

Cash 2 .82 3 .51 4.39 6.07 8 .21

Margins (%)

Gross Margin 38 .3% 34.1% 35.0% 35.6% 36 .7%

EBITDA 14 .8% 14.0% 14.1% 14.5% 15 .3%

PAT 8 .7% 9.2% 9.3% 10.2% 11 .1%

Financial

Debt/Equity (x) 0 .68 0 .84 0.42 0.17 0 .05

Debtor Days 61.1 63.1 67 .9 69 .0 70.3

Asset Turn ov er 1. 7 1.4 1 .6 1 .7 1. 7

Dividend payout 13 .1% 11.0% 11.7% 11.8% 12 .2%

Valuations

PE (x) 35.5 29.0 24 .1 18 .5 14.3

P/BV (x) 12.7 9.1 6 .8 5 .1 3.9

EV/EBITDA (x) 21.9 20.2 16 .5 13 .0 9.8EV/Sales (x) 3.2 2.8 2 .3 1 .9 1.5

RO E 35 .4% 31.3% 28.4% 27.8% 27 .0%

RO CE 30 .3% 21.7% 26.1% 29.9% 32 .2%


A C Choksi

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A C Choksi

Technical Chart

Technical View for Marico:

The scrip is in uptrend started from Rs. 112.10 since Feb'11 and it made top of Rs. 150 in April'11. Scrip got support

Rs. 127 and pst two weeks it is moving up despite weakness in general marketing indicating underlying strength in it. A

shown on chart, 200 days EMA is placed at Rs. 125 which is strong support where investors can buy for the dece

target of Rs. 158, in short to medium term. Long term target for the scrip is seen around Rs. 170. Rock bottom for t

scrip is seen around Rs. 115 if the market dips in short to medium term.

Support: Rs. 125Target: Rs. 158/170Rock Bottom: Rs. 115

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Notes:

May 23, 201

A C Choksi

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Notes:

A C Choksi

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Equity Research Team

Swati Gupta- 022 [email protected]

sclaimer

e information and views presented in this reportare prepared byA C Choksi Share Brokers Private Limited.The information containedherein isbased on our analysis and up urcesthat weconsiderreliable. We, however,do not vouch forthe accuracy or the completenessthereof. This material isfor personal informationand weare not responsible for as incurredbased upon it. The investments discussedor recommended in thisreport may not be suitable for allinvestors. Investors must make their owninvestment decisions bastheir specific investmentobjectives and financialpositionand using such independent advice, as they believe necessary. While acting uponany informationor analysis mentionhis report, investors may please note that neither A C Choksi Share Brokers PrivateLimitednor anypersonconnected withany associated companies of A CChoksi Shaokers Private Limitedaccepts any liability arising from the use of this information and viewsmentioned in this document.The analysts for thisreport certifiesthat all ofthe viewpressed inthis report accurately reflect his or her personal views aboutthe subject company or companiesand itsor their securities, and nopart of hisor hercompensation was, is or will bectly orindirectlyrelatedto specific recommendations or views expressed inthis report.

Disclosure of Interest



A C Choksi

Nurturing Wealth

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