Indian Stock Pick – Marico Limited, Buy at Rs 61

maricoMarico (MARICO), incorporated on Oct. 13, 1988, is among the leaders in the fast moving consumer goods (FMCG) and services sector. Earlier known as Marico Foods, it got its present name with effect from Oct. 31, 1989. Marico holds a leadership position in the Indian FMCG space. Marico's Products and Services in Hair care, Skin Care and Healthy Foods reach out to more than 20 countries in the Middle East, Asian sub-continent, Australia and USA. Marico is a branded player in Beauty and Wellness solutions. Ranked amongst one of eight Indian companies in Standard & Poor's list of Global Challenger Companies in 2007, Marico's Overseas Sales franchise is one of the largest amongst Indian Companies and is entirely in branded products and services.

The company's business is consolidated under a group structure forming the three strategic business units of Consumer Products Business (India) including personal & nature care and wellness & new products; the International Business Group with International FMCG Business and Sundari Business; and Kaya (a wholly owned subsidiary of Marico) looking after Kaya Skin clinics and Kaya Life, its obesity control venture.

Products & Services-

Marico's Products and Services include Hair care, Skin Care and Healthy Foods. The Company's products are sold under the brand names Parachute, Saffola, Sweekar, Marico's Hair & Care, Revive and Sil. Company product list consist of Parachute, parachute advanced, parachute jasmine, aftershower, hair cream, safola, safola gold, safola salt, safola testy blend, mediker, silk n shine, revive, Hair n care, shanty amla, sweekar, SIL, oil of malabar, sundari, Kaya skin clinics, kaya life etc.

Marico markets well-known brands such as Parachute, Saffola, Kaya, Sundari and Fiancee to name few, most of which enjoy leadership positions (No. 1 or No. 2), with significant market shares in respective categories. Marico is present in the Skin Care Solutions segment through Kaya Skin Clinics (84 clinics in India and The Middle East) and Weight Management segment through Kaya Life (3 clinics in India). With a widespread distribution network of more than 2.5 Million outlets in India and overseas, one in every eight Indians and six Egyptians is a Marico consumer, while over 70 Million consumer packs from Marico reach approximately 130 million consumers in about 23 million households, every month.

01-oct-2008 to 31-dec-2008 (Third Quarter) Financial Results (Rs. Lakhs) Net Sales/Income from Operations 50044.98 Other Operating Income 216.26 Net Profit for the period 5171.70 Basic EPS (in Rs.) .85

Valuation- Defying global slowdown, Marico is in full swing to launch new products. Company is expanding its product range by acquiring new brands, launching new products, thereby reducing dependence on Parachute. At CMP, stock is trading at attractive valuation of 17.4 X of its FY2010 estimated EPS. We recommend investors to "BUY" "Marico industries" with medium to long-term investment prospective.

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