institutional equity research marico ltd. (mrco in)

INSTITUTIONAL EQUITY RESEARCH

Page | 1 | PHILLIPCAPITAL INDIA RESEARCH Please see penultimate page for additional important disclosures. PhillipCapital (India) Private Limited. (“PHILLIPCAP”) is a foreign broker-dealer unregistered in the USA. PHILLIPCAP research is prepared by research analysts who are not registered in the USA. PHILLIPCAP research is distributed in the USA pursuant to Rule 15a-6 of the Securities Exchange Act of 1934 solely by Rosenblatt Securities Inc, an SEC registered and FINRA-member broker-dealer.

Marico Ltd. (MRCO IN)

Perfectly oiled for growth

INDIA | FMCG | Quarterly Update

Perfectly oiled for growth ; Upgrade to BUY: We upgrade Marico to BUY from Neutral with TP of Rs.470 (40x FY23EPS) vs 385 (35x FY23EPS) earlier as 1) it is likely to clock double digit volume growth in FY22, ahead of 8-10% aspiration as all three core categories within domestic business show momentum 2) aggressive scale up of Foods business (will double business in two years from Rs 2bn in FY20) 3) Ebitda margin to see c100bps expansion over FY21-23 owing to superior product mix (increased salience of high margin VAHO portfolio), partial price hikes taken in Parachute and Saffola in order to mitigate RM pressure, cost efficiency programme (achieved cost savings of Rs 1.5-2bn, partial benefits are expected to flow in FY22 as well) and backward integration, once foods business crosses threshold of Rs 4-5 bn revenue and 5) Recovery in International business, with clear focus on profitability. Key risks to our call – 1) Hyperinflation in vegetable oil basket may derail our growth story. Top takeaways from Q3FY21 Marico Q3FY21 results were marginally below our estimates owing to RM pressure,

however domestic volume growth of 15% YoY was quite impressive and it was broad based across categories. All three core segments (Saffola -17% ; VAHO -21% ; Parachute -8%) delivered strong volume led performance on back of favourable base, market share gains from unorganized sector and increased in-home consumption (more applicable to Saffola).

International business saw 8% CC revenue growth owing to strong growth in Bangladesh (up 15% YoY); whereas other markets (55% of total sales) continue to disappoint, with clear focus on improving profitability. Bangladesh non-coconut oil portfolio grew 27% yoy and its contribution inched up to 40% of total sales vs 25% in FY18.

Gross margin contraction (down 223 bps YoY) accelerated vs previous qtr (down 163 bps YoY) due to RM inflation (Copra up 26%, Rice brand oil up 28%, LLP up 12%, HDPE up 18% YoY) and mgmt strategy of not passing on entire inflation to end customers.

Ebitda growth remained muted (up 11% YoY) despite tight lid on A&P spends (up 4% YoY) mainly due to higher employee costs. Employee Cost was up 28% YoY, due to; i) higher incentive payout owing to better performance during the quarter; ii) integration of Beardo (not in the base quarter); and iii) higher share-based payout (linked to Marico’s share price performance on the bourses). Excluding the same, the increase in employee cost was in line with average salary increments.

(Rs mn) 3QFY21 3QFY20 yoy % 2QFY21 qoq %

Net Sales 21220 18240 16.3 19890 6.7

EBITDA 4130 3730 10.7 3890 6.2

PAT 3070 2720 12.9 2970 3.4

BUY (Upgrade) CMP Rs 414 TARGET Rs 470 (14%)

SEBI CATEGORY: LARGE CAP

COMPANY DATA

O/S SHARES (MN) : 1291

MARKET CAP (RSBN) : 545

MARKET CAP (USDBN) : 7.5

52 - WK HI/LO (RS) : 432 / 234

LIQUIDITY 3M (USDMN) : 16.8

PAR VALUE (RS) : 1

SHARE HOLDING PATTERN, %

Dec 20 Sep 20 Jun 20

PROMOTERS : 59.6 59.6 59.6

FII / NRI : 24.4 23.9 24.0

FI / MF : 10.0 10.2 9.7

NON PRO : 1.6 1.7 1.8

PUBLIC & OTHERS : 4.3 4.5 4.8

KEY FINANCIALS

Rs mn FY21E FY22E FY23E

Net Sales 78,707 88,897 98,292 EBITDA 16,127 18,353 20,622 Net Profit 11,533 13,203 14,921 EPS, Rs 8.9 10.2 11.6 PER, x 46.3 40.5 35.8 EV/EBITA, x 32.6 28.5 25.1 P/BV, x 15.8 14.1 12.4 ROE, % 34.1 34.8 34.6 Debt/Equity (%) 9.9 8.8 7.8

CHANGE IN ESTIMATES

__Revised Est. __ __% Revision__

Rs bn FY22E FY23E FY22E FY23E

Revenue 88,897 98,292 6.7% 7.2%

EBITDA 18,353 20,622 5.5% 6.7%

Core PAT 13,203 14,921 4.6% 5.8%

EPS (Rs) 10.2 11.6 4.4% 6.0% Vishal Gutka, Research Analyst (+ 9122 6246 4118) [email protected]

mailto:[email protected]

Page | 2 | PHILLIPCAPITAL INDIA RESEARCH

MARICO INDUSTRIES QUARTERLY UPDATE

Core Categories Saffola (20% of India business): saw fifth consecutive qtr of double digit growth

momentum (up c.17% in volume terms) despite overall slowdown in home cooking and packaged food consumption on back of 1) increased penetration (c65% growth contribution) through trials and brand activation and balance coming through additional usage 2) higher consumer preference towards trusted brands.

Management expects high single digit volume growth to continue in medium term and has taken the following initiatives such as 1) Focussing on Saffola Gold, premium end brand rather than entry level (Saffola Activ) brand, which faces severe competition 2) Change in communication / positioning (from fear / anxiety to hope) 3) Pricing Interventions (removed ineffective consumer promotions/ BTL activities and diverted them towards direct price correction 4) Reduced channel conflict – bringing parity in prices via focussing on different SKU’s

Foods story is just beginning to unfold : Strong growth in Foods business (up 74%) was on account of increased

penetration and market share gain in oats portfolio (oats revenue was up 50% YoY). Management expect Foods business revenue to reach Rs 4.5-5bn in FY22 vs expected Rs 3.5 bn in FY21

Marico intends to focus on medium-size food categories which are of relevant mass, decent unorganized market size and certain tailwinds accelerating their growth journey rather than going in for long – haul of creating high margin premium personal care categories – which will take years to develop. It is of the view, if it able to garner 10-15% market share in these fast growing categories – it will turn out quite meaningful for the company

Moreover, it also clarified as to why it has withdrawn from hygiene category, which contributed 1% to overall sales in 9MFY21 since legacy brands of incumbents have very strong foothold and it has decided to put its entire weight behind fast growing food categories. Mgmt believe change in food habits is of permanent nature and even before covid-19, trend of healthy foods / habits was inching-up; however breakout of covid-19 has put growth on high pedestal within food segment.

Recently launched Saffola Honey is showing strong traction across channels and has garnered double digit /20% market share in MT/E-commerce respectively. Notably, for Honey category as a whole, MT and E-commerce contributed c35% to overall sales. Moreover, growth is honey segment was more restrained by supply chain constraints and it aspires to achieve to revenue size of Rs 1 bn in FY22, once it develops required supply chain capabilities.

It is targeting distribution reach of 190,000 outlets for Honey, similar to reach of Masala Oats that company already has

Oats on a roll: Oats business grew 50% YoY on back of distribution expansion and market share gains. Mgmt stated it has gained market share in plain oats segment whereas its strategy of increase in penetration, launching regional variants and positioning it as in-between meal rather than breakfast meal is driving growth for Masala Oats portfolio

Banking on Soya chunks for next leg of growth: Soya chunks are Rs 20 bn market, with 40% contribution coming from branded/organized space. Mgmt stated that it will be really satisfied if it is able to garner 10-15% market share within branded consumer space leveraging Saffola’s brand equity.

Marico launched Saffola Arogyam Chyawan Amrut, marketed as enhanced variation of traditional Chyawanprash ( immunity boosting ingredients) during 2QFY21 is tracking as per internal expectations



VAHO (24% of India business) saw volume uptick (up 21% yoy) after five consecutive qtr of subdued performance on back of favourable base, pent-up demand after softer 1HFY21, increased penetration of larger packs and market share gains. Mgmt stated increase in direct distribution reach, significant increase in household consumption and pricing correction led to such phenomenal performance. Continued momentum in General Trade and rural areas along with normalcy coming back to Modern Trade has led to such strong performance

Management expect double digit volume growth to continue from medium term perspective and it would leverage this opportunity to enter into new categories (within VAHO) along with implementation of its three- pronged strategy (participate aggressively at bottom of pyramid, pricing and brand renovation in mid segment, newer offerings at premium end) will further enhance the market leadership position

It believes that there won’t be any need to take material price hikes in VAHO despite inflationary pressure in copra price as Marico has carried out spend effectiveness studies for VAHO portfolio and based on results of the study, it has reduced consumer promotions and BTL activities accordingly and in fact, it also has price correction in couple of key SKU/ brands

Parachute (38% of India business) is seeing batter market share gain opportunities both in rural and urban on back of distribution expansion and rural penetration.

Marico has taken effective price hike of 5% via roll-back of consumer promotional offers, selected price hikes in key SKU and believes it provides another opportunity to gain market share from unorganized sector

Management does not expect any material annualized inflation in copra price in FY22; as copra price have corrected 10% from its recent peak in December; it is expecting another round of decline (10-15%) once flush season kicks in



Q3FY21 results – Strong domestic performance led to volume growth

Consolidated (Rs mn) 3QFY20 3QFY21 Yoy % Comments

Domestic Volume growth (%) -1% 15% Strong domestic volume growth led to high double digit volume growth

Net sales

18,240 21,220 16.3

Double digit growth supported by robust growth across all category and

good show in international business

Operating Costs (14,510) (17,090) 17.8

EBITDA 3,730 4,130 10.7

EBITDA Margin (%) 20.4 19.5 -99bps Contraction in margin due to higher employee cost

Depreciation (320) (360) 12.5

Interest (120) (70) -41.7

Other Income 290 240 -17.2

PBT 3,580 3,940 10.1

Provision for Tax (820) (820) 0.0

-Tax Rate (%) 22.9 20.8 -209bps

Net profit before minority 2,760 3,120 13.0

Minority Interest (40) (50) 25.0

Share of profit from associate - -

Adj PAT 2,720 3,070 12.9

Net Profit Margin 14.9 14.5 -44bps

EO Items - -

Reported PAT 2,720 3,070 12.9

EPS 2.1 2.4 12.9

Gross Profit 8,960 9,950 11.0

Gross Margins 49.1 46.9 -223bps Increase in RM inflation led to gross margin pressure

Cost Details 3QFY20 3QFY21 Yoy %

Raw Material Consumption 9,280 11,270 21.4

As a % of sales 50.9 53.1 223bps

Employees cost 1,160 1,480 27.6

As a % of sales 6.4 7.0 61bps

Ad spends 1,850 1,930 4.3

As a % of sales 10.1 9.1 -105bps

Other expenditure 2,220 2,410 8.6

As a % of sales 12.2 11.4 -81bps

Source: Company, PhillipCapital India Research



Growth rates across key brands

Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21

Growth rates (% yoy)

Markets

Domestic

- Volume 1.0 12.4 6.0 5.0 8.0 6.0 (1.0) (1.0) (3.0) (14.0) 11.0 18.0

- Value 12.0 23.0 20.0 15.0 9.0 7.0 (2.0) (2.0) (7.0) (14.0) 8.0 15.0

International

- Reported 13.0 9.0 18.0 16.0 14.0 9.0 8.0 8.0 (5.0) 2.0 12.0 11.0

- Constant Currency 16.0 7.0 11.0 10.0 7.0 7.0 10.0 10.0 (6.0) (4.0) 7.0 8.0

Categories

Parachute Rigids

- Volume (5.0) 9.0 8.0 9.0 6.0 9.0 (2.0) (2.0) (8.0) (11.0) 10.0 8.0

- Value 24.0 38.0 32.0 19.0 4.0 8.0 (5.0) (5.0) (12.0) (12.0) 8.0 9.0

VAHO

- Volume 11.0 15.0 5.0 7.0 1.0 7.0 (7.0) (7.0) (11.0) (30.0) 4.0 21.0

- Value 9.0 12.0 12.0 19.0 7.0 11.0 (17.0) (17.0) (18.0) (32.0) (1.0) 21.0

Saffola

- Volume (1.0) 10.0 5.0 2.0 18.0 3.0 11.0 11.0 25.0 16.0 20.0 17.0

- Value (3.0) 9.0 9.0 5.0 15.0 6.0 13.0 13.0 25.0 16.0 16.0 26.0




Inflationary pressure on benign input prices led to contraction in gross margins


Continuous growth across all categories


21.0

26.0

(15.0)

28.0

12.0

18.0

-20

-15

-10

-5

0

5

10

15

20

25

30

35

CochinCoconut

Copra Calicut Safflower Rice Bran LP HDPE

Inflation (yoy)

-5

9 8

9

6

9

-2 -2

-8

-11

10 8

-15

-10

-5

0

5

10

15 Parachute (Volume %)

-1

10

5

2

18

3

11 11

25

16

20

17

-5

0

5

10

15

20

25

30Saffola (Volume %)

11 15

5 7

1

7

-7 -7 -11

-30

4

21

-40

-30

-20

-10

0

10

20

30VAHO (Volume %)



Financials Income Statement Y/E Mar, Rs mn FY20 FY21E FY22E FY23E

Net sales 73,150 78,707 88,897 98,292 Growth, % -0.3 7.6 12.9 10.6 Raw material expenses -37,450 -41,008 -45,724 -50,296 Employee expenses -4,780 -5,497 -5,937 -6,530 Other Operating expenses -16,230 -16,075 -18,883 -20,844 EBITDA (Core) 14,690 16,127 18,353 20,622 Growth, % 10.8 9.8 13.8 12.4 Margin, % 20.1 20.5 20.6 21.0 Depreciation -1,400 -1,382 -1,525 -1,669 EBIT 13,290 14,745 16,828 18,953 Growth, % 11.2 10.9 14.1 12.6 Margin, % 18.2 18.7 18.9 19.3 Interest paid -500 -325 -325 -325 Other Income 1,240 992 1,141 1,312 Pre-tax profit 14,030 15,412 17,644 19,940 Tax provided -3,310 -3,879 -4,441 -5,019 Profit after tax 10,720 11,533 13,203 14,921 Others (Minorities, Associates) -220 0 0 0 Net Profit 10,500 11,533 13,203 14,921 Growth, % (5.7) 9.8 14.5 13.0 Net Profit (adjusted) 10,500 11,533 13,203 14,921 Unadj. shares (m) 1,291 1,291 1,291 1,291 Wtd avg shares (m) 1,291 1,291 1,291 1,291

Balance Sheet Y/E Mar, Rs mn FY20 FY21E FY22E FY23E

Cash & bank 2,790 5,386 8,486 12,907 Marketable securities at cost 6,280 6,280 6,280 6,280 Debtors 5,390 6,038 6,819 7,540 Inventory 13,800 14,848 16,771 18,543 Loans & advances 50 50 50 50 Other current assets 3,430 3,430 3,430 3,430 Total current assets 31,740 36,032 41,837 48,751 Investments 1,050 1,050 1,050 1,050 Gross fixed assets 16,770 18,020 19,270 20,520 Less: Depreciation -4,270 -5,652 -7,177 -8,846 Add: Capital WIP 580 580 580 580 Net fixed assets 13,080 12,948 12,673 12,254 Non-current assets 1,100 1,100 1,100 1,100 Total assets 48,560 52,721 58,249 64,745 Current liabilities 17,850 18,593 19,955 21,211 Provisions 210 210 210 210 Total current liabilities 18,060 18,803 20,165 21,421 Non-current liabilities 140 140 140 140 Total liabilities 18,200 18,943 20,305 21,561 Paid-up capital 1,290 1,290 1,290 1,290 Reserves & surplus 28,940 32,488 36,654 41,893 Shareholders’ equity 30,360 33,778 37,944 43,183 Total equity & liabilities 48,560 52,721 58,249 64,745

Source: Company, PhillipCapital India Research Estimates

Cash Flow Y/E Mar, Rs mn FY20 FY21E FY22E FY23E

Pre-tax profit 14,030 15,412 17,644 19,940 Depreciation 1,400 1,382 1,525 1,669 Chg in working capital 450 -953 -1,342 -1,237 Total tax paid -2,950 -3,879 -4,441 -5,019 Cash flow from operating activities 12,930 11,961 13,387 15,353 Capital expenditure -2,560 -1,250 -1,250 -1,250 Chg in investments -460 0 0 0 Chg in marketable securities -2,370 0 0 0 Cash flow from investing activities -5,390 -1,250 -1,250 -1,250 Free cash flow 7,540 10,711 12,137 14,103 Equity raised/(repaid) 480 -240 0 0 Debt raised/(repaid) -40 0 0 0 Dividend (incl. tax) -10,012 -7,745 -9,036 -9,682 Cash flow from financing activities -9,782 -8,115 -9,036 -9,682 Net chg in cash -2,242 2,596 3,100 4,421

Valuation Ratios

FY20 FY21E FY22E FY23E

Per Share data EPS (INR) 8.1 8.9 10.2 11.6

Growth, % (5.8) 9.8 14.5 13.0 Book NAV/share (INR) 23.4 26.2 29.4 33.5 FDEPS (INR) 8.1 8.9 10.2 11.6 CEPS (INR) 9.2 10.0 11.4 12.9 CFPS (INR) 9.1 8.5 9.5 10.9 DPS (INR) 6.7 6.0 7.0 7.5 Return ratios

Return on assets (%) 23.3 23.4 24.4 24.8 Return on equity (%) 34.7 34.1 34.8 34.6 Return on capital employed (%) 36.8 36.6 37.4 37.3 Turnover ratios

Asset turnover (x) 3.5 3.6 3.9 4.2 Sales/Total assets (x) 1.5 1.6 1.6 1.6 Sales/Net FA (x) 5.9 6.0 6.9 7.9 Working capital/Sales (x) 0.1 0.1 0.1 0.1 Receivable days 26.9 28.0 28.0 28.0 Inventory days 68.9 68.9 68.9 68.9 Payable days 61.1 61.4 61.5 61.8 Working capital days 24.1 26.8 29.2 31.0 Liquidity ratios Current ratio (x) 1.8 1.9 2.1 2.3 Quick ratio (x) 1.0 1.1 1.3 1.4 Interest cover (x) 26.6 45.4 51.8 58.3 Total debt/Equity (%) 11.1 9.9 8.8 7.8 Net debt/Equity (%) 1.9 (6.0) (13.5) (22.1) Valuation PER (x) 50.9 46.3 40.5 35.8 PEG (x) - y-o-y growth (8.8) 4.7 2.8 2.8 Price/Book (x) 17.7 15.8 14.1 12.4 EV/Net sales (x) 7.2 6.7 5.9 5.3 EV/EBITDA (x) 36.0 32.6 28.5 25.1 EV/EBIT (x) 39.8 35.7 31.1 27.4



Stock Price, Price Target and Rating History

Rating Methodology We rate stock on absolute return basis. Our target price for the stocks has an investment horizon of one year. We have different threshold for large market capitalisation stock and Mid/small market capitalisation stock. The categorisation of stock based on market capitalisation is as per the SEBI requirement.

Large cap stocks Rating Criteria Definition

BUY >= +10% Target price is equal to or more than 10% of current market price

NEUTRAL -10% > to < +10% Target price is less than +10% but more than -10%

SELL <= -10% Target price is less than or equal to -10%.

Mid cap and Small cap stocks Rating Criteria Definition

BUY >= +15% Target price is equal to or more than 15% of current market price

NEUTRAL -15% > to < +15% Target price is less than +15% but more than -15%

SELL <= -15% Target price is less than or equal to -15%.

Disclosures and Disclaimers PhillipCapital (India) Pvt. Ltd. has three independent equity research groups: Institutional Equities, Institutional Equity Derivatives, and Private Client Group. This report has been prepared by Institutional Equities Group. The views and opinions expressed in this document may, may not match, or may be contrary at times with the views, estimates, rating, and target price of the other equity research groups of PhillipCapital (India) Pvt. Ltd.

This report is issued by PhillipCapital (India) Pvt. Ltd., which is regulated by the SEBI. PhillipCapital (India) Pvt. Ltd. is a subsidiary of Phillip (Mauritius) Pvt. Ltd. References to "PCIPL" in this report shall mean PhillipCapital (India) Pvt. Ltd unless otherwise stated. This report is prepared and distributed by PCIPL for information purposes only, and neither the information contained herein, nor any opinion expressed should be construed or deemed to be construed as solicitation or as offering advice for the purposes of the purchase or sale of any security, investment, or derivatives. The information and opinions contained in the report were considered by PCIPL to be valid when published. The report also contains information provided to PCIPL by third parties. The source of such information will usually be disclosed in the report. Whilst PCIPL has taken all reasonable steps to ensure that this information is correct, PCIPL does not offer any warranty as to the accuracy or completeness of such information. Any person placing reliance on the report to undertake trading does so entirely at his or her own risk and PCIPL does not accept any liability as a result. Securities and Derivatives markets may be subject to rapid and unexpected price movements and past performance is not necessarily an indication of future performance.

This report does not regard the specific investment objectives, financial situation, and the particular needs of any specific person who may receive this report. Investors must undertake independent analysis with their own legal, tax, and financial advisors and reach their own conclusions regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realised. Under no circumstances can it be used or considered as an offer to sell or as a solicitation of any offer to buy or sell the

B (TP 360) B (TP 360)

B (TP 380)

B (TP 370)

B (TP 425) B (TP 420) B (TP 420) B (TP 410) N (TP 420)

N (TP 300)

N (TP 265)

N (TP 350) N (TP 385)

50

100

150

200

250

300

350

400

450

J-18 M-18A-18 J-18 J-18 A-18 O-18 N-18 J-19 F-19 A-19M-19 J-19 A-19 O-19 N-19 J-20 F-20 A-20M-20 J-20 A-20 S-20 N-20 D-20



securities mentioned within it. The information contained in the research reports may have been taken from trade and statistical services and other sources, which PCIL believe is reliable. PhillipCapital (India) Pvt. Ltd. or any of its group/associate/affiliate companies do not guarantee that such information is accurate or complete and it should not be relied upon as such. Any opinions expressed reflect judgments at this date and are subject to change without notice.

Important: These disclosures and disclaimers must be read in conjunction with the research report of which it forms part. Receipt and use of the research report is subject to all aspects of these disclosures and disclaimers. Additional information about the issuers and securities discussed in this research report is available on request.

Certifications: The research analyst(s) who prepared this research report hereby certifies that the views expressed in this research report accurately reflect the research analyst’s personal views about all of the subject issuers and/or securities, that the analyst(s) have no known conflict of interest and no part of the research analyst’s compensation was, is, or will be, directly or indirectly, related to the specific views or recommendations contained in this research report.

Additional Disclosures of Interest: Unless specifically mentioned in Point No. 9 below: 1. The Research Analyst(s), PCIL, or its associates or relatives of the Research Analyst does not have any financial interest in the company(ies) covered in

this report. 2. The Research Analyst, PCIL or its associates or relatives of the Research Analyst affiliates collectively do not hold more than 1% of the securities of the

company (ies)covered in this report as of the end of the month immediately preceding the distribution of the research report. 3. The Research Analyst, his/her associate, his/her relative, and PCIL, do not have any other material conflict of interest at the time of publication of this

research report. 4. The Research Analyst, PCIL, and its associates have not received compensation for investment banking or merchant banking or brokerage services or for

any other products or services from the company(ies) covered in this report, in the past twelve months. 5. The Research Analyst, PCIL or its associates have not managed or co-managed in the previous twelve months, a private or public offering of securities for

the company (ies) covered in this report. 6. PCIL or its associates have not received compensation or other benefits from the company(ies) covered in this report or from any third party, in

connection with the research report. 7. The Research Analyst has not served as an Officer, Director, or employee of the company (ies) covered in the Research report. 8. The Research Analyst and PCIL has not been engaged in market making activity for the company(ies) covered in the Research report. 9. Details of PCIL, Research Analyst and its associates pertaining to the companies covered in the Research report:

Sr. no. Particulars Yes/No

1 Whether compensation has been received from the company(ies) covered in the Research report in the past 12 months for investment banking transaction by PCIL

No

2 Whether Research Analyst, PCIL or its associates or relatives of the Research Analyst affiliates collectively hold more than 1% of the company(ies) covered in the Research report

No

3 Whether compensation has been received by PCIL or its associates from the company(ies) covered in the Research report No

4 PCIL or its affiliates have managed or co-managed in the previous twelve months a private or public offering of securities for the company(ies) covered in the Research report

No

5 Research Analyst, his associate, PCIL or its associates have received compensation for investment banking or merchant banking or brokerage services or for any other products or services from the company(ies) covered in the Research report, in the last twelve months

No

Independence: PhillipCapital (India) Pvt. Ltd. has not had an investment banking relationship with, and has not received any compensation for investment banking services from, the subject issuers in the past twelve (12) months, and PhillipCapital (India) Pvt. Ltd does not anticipate receiving or intend to seek compensation for investment banking services from the subject issuers in the next three (3) months. PhillipCapital (India) Pvt. Ltd is not a market maker in the securities mentioned in this research report, although it, or its affiliates/employees, may have positions in, purchase or sell, or be materially interested in any of the securities covered in the report.

Suitability and Risks: This research report is for informational purposes only and is not tailored to the specific investment objectives, financial situation or particular requirements of any individual recipient hereof. Certain securities may give rise to substantial risks and may not be suitable for certain investors. Each investor must make its own determination as to the appropriateness of any securities referred to in this research report based upon the legal, tax and accounting considerations applicable to such investor and its own investment objectives or strategy, its financial situation and its investing experience. The value of any security may be positively or adversely affected by changes in foreign exchange or interest rates, as well as by other financial, economic, or political factors. Past performance is not necessarily indicative of future performance or results.

Sources, Completeness and Accuracy: The material herein is based upon information obtained from sources that PCIPL and the research analyst believe to be reliable, but neither PCIPL nor the research analyst represents or guarantees that the information contained herein is accurate or complete and it should not be relied upon as such. Opinions expressed herein are current opinions as of the date appearing on this material, and are subject to change without notice. Furthermore, PCIPL is under no obligation to update or keep the information current. Without limiting any of the foregoing, in no event shall PCIL, any of its affiliates/employees or any third party involved in, or related to computing or compiling the information have any liability for any damages of any kind including but not limited to any direct or consequential loss or damage, however arising, from the use of this document.

Copyright: The copyright in this research report belongs exclusively to PCIPL. All rights are reserved. Any unauthorised use or disclosure is prohibited. No reprinting or reproduction, in whole or in part, is permitted without the PCIPL’s prior consent, except that a recipient may reprint it for internal circulation only and only if it is reprinted in its entirety.

Caution: Risk of loss in trading/investment can be substantial and even more than the amount / margin given by you. Investment in securities market are subject to market risks, you are requested to read all the related documents carefully before investing. You should carefully consider whether trading/investment is appropriate for you in light of your experience, objectives, financial resources and other relevant circumstances. PhillipCapital and any of its employees, directors, associates, group entities, or affiliates shall not be liable for losses, if any, incurred by you. You are further cautioned that trading/investments in financial markets are subject to market risks and are advised to seek independent third party trading/investment advice outside PhillipCapital/group/associates/affiliates/directors/employees before and during your trading/investment. There is no guarantee/assurance as to returns or profits or capital protection or appreciation. PhillipCapital and any of its employees, directors, associates, and/or employees, directors, associates of PhillipCapital’s group entities or affiliates is not inducing you for trading/investing in the financial market(s). Trading/Investment decision is your sole responsibility. You must also read the Risk Disclosure Document and Do’s and Don’ts before investing.



Kindly note that past performance is not necessarily a guide to future performance.

For Detailed Disclaimer: Please visit our website www.phillipcapital.in IMPORTANT DISCLOSURES FOR U.S. PERSONS This research report is a product of PhillipCapital (India) Pvt. Ltd. which is the employer of the research analyst(s) who has prepared the research report. PhillipCapital (India) Pvt Ltd. is authorized to engage in securities activities in India. PHILLIPCAP is not a registered broker-dealer in the United States and, therefore, is not subject to U.S. rules regarding the preparation of research reports and the independence of research analysts. This research report is provided for distribution to “major U.S. institutional investors” in reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”). If the recipient of this report is not a Major Institutional Investor as specified above, then it should not act upon this report and return the same to the sender. Further, this report may not be copied, duplicated and/or transmitted onward to any U.S. person, which is not a Major Institutional Investor.

Any U.S. recipient of this research report wishing to effect any transaction to buy or sell securities or related financial instruments based on the information provided in this research report should do so only through Rosenblatt Securities Inc, 40 Wall Street 59th Floor, New York NY 10005, a registered broker dealer in the United States. Under no circumstances should any recipient of this research report effect any transaction to buy or sell securities or related financial instruments through PHILLIPCAP. Rosenblatt Securities Inc. accepts responsibility for the contents of this research report, subject to the terms set out below, to the extent that it is delivered to a U.S. person other than a major U.S. institutional investor.

The analyst whose name appears in this research report is not registered or qualified as a research analyst with the Financial Industry Regulatory Authority (“FINRA”) and may not be an associated person of Rosenblatt Securities Inc. and, therefore, may not be subject to applicable restrictions under FINRA Rules on communications with a subject company, public appearances and trading securities held by a research analyst account. Ownership and Material Conflicts of Interest Rosenblatt Securities Inc. or its affiliates does not ‘beneficially own,’ as determined in accordance with Section 13(d) of the Exchange Act, 1% or more of any of the equity securities mentioned in the report. Rosenblatt Securities Inc, its affiliates and/or their respective officers, directors or employees may have interests, or long or short positions, and may at any time make purchases or sales as a principal or agent of the securities referred to herein. Rosenblatt Securities Inc. is not aware of any material conflict of interest as of the date of this publication Compensation and Investment Banking Activities Rosenblatt Securities Inc. or any affiliate has not managed or co-managed a public offering of securities for the subject company in the past 12 months, nor received compensation for investment banking services from the subject company in the past 12 months, neither does it or any affiliate expect to receive, or intends to seek compensation for investment banking services from the subject company in the next 3 months. Additional Disclosures This research report is for distribution only under such circumstances as may be permitted by applicable law. This research report has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient, even if sent only to a single recipient. This research report is not guaranteed to be a complete statement or summary of any securities, markets, reports or developments referred to in this research report. Neither PHILLIPCAP nor any of its directors, officers, employees or agents shall have any liability, however arising, for any error, inaccuracy or incompleteness of fact or opinion in this research report or lack of care in this research report’s preparation or publication, or any losses or damages which may arise from the use of this research report.

PHILLIPCAP may rely on information barriers, such as “Chinese Walls” to control the flow of information within the areas, units, divisions, groups, or affiliates of PHILLIPCAP.

Investing in any non-U.S. securities or related financial instruments (including ADRs) discussed in this research report may present certain risks. The securities of non-U.S. issuers may not be registered with, or be subject to the regulations of, the U.S. Securities and Exchange Commission. Information on such non-U.S. securities or related financial instruments may be limited. Foreign companies may not be subject to audit and reporting standards and regulatory requirements comparable to those in effect within the United States.

The value of any investment or income from any securities or related financial instruments discussed in this research report denominated in a currency other than U.S. dollars is subject to exchange rate fluctuations that may have a positive or adverse effect on the value of or income from such securities or related financial instruments.

Past performance is not necessarily a guide to future performance and no representation or warranty, express or implied, is made by PHILLIPCAP with respect to future performance. Income from investments may fluctuate. The price or value of the investments to which this research report relates, either directly or indirectly, may fall or rise against the interest of investors. Any recommendation or opinion contained in this research report may become outdated as a consequence of changes in the environment in which the issuer of the securities under analysis operates, in addition to changes in the estimates and forecasts, assumptions and valuation methodology used herein.

No part of the content of this research report may be copied, forwarded or duplicated in any form or by any means without the prior written consent of PHILLIPCAP and PHILLIPCAP accepts no liability whatsoever for the actions of third parties in this respect.

PhillipCapital (India) Pvt. Ltd. Registered office: 18th floor, Urmi Estate, Ganpatrao Kadam Marg, Lower Parel (West), Mumbai – 400013, India.

http://www.phillipcapital.in/

institutional equity research marico ltd. (mrco in)

Documents