EUR 120.00 For Business Accounts Only

MOSL: Morning India (9/August/22): 1. Marico (Margin surprise, volume growth to recover gradually); 2. Bharti Airtel; 3. Indian Hotels; 4. Vinati Organics; 5. Natl. Aluminium; 6. IRB Infra.Devl

Morning India (9/August/22):

Today’s top research idea
Marico: Margin surprise, volume growth to recover gradually
-    MRCO's 1QFY23 earnings were in line on the volume, sales, and gross profit front, but surprised positively at the EBITDA and PAT level. The margin base gets less challenging from 2QFY23.
-    Due to the more gradual than expected recovery in volumes and some price corrections taken to boost growth, we have cut our FY23 and FY24 EPS forecasts by 4-5%. 
-    Its earnings growth prospects are nevertheless healthy ~16% CAGR over FY22-24, with RoE of over 40%.
-    The much-needed diversification is gathering momentum in the Foods and digital-first brands. If sustained, this can lead to higher multiples for MRCO as compared to the past. For now, its earnings growth provides a safe haven v/s it's Staples peers in an uncertain environment. We maintain our target multiple of 45x Jun'24E EPS to arrive at our TP of INR605. We reiterate our Buy rating on the stock.

Piping hot news
Passenger vehicle sales in 2022 set to beat record estimates
India's passenger vehicle sales this year are expected to be about a quarter of a million units more than the initial projections that were themselves for record high volumes, industry executives said. The industry is upbeat amid improving component supplies that is helping automakers step up production and clear backlogs faster, and new bookings that continue to be strong ahead of the festive season despite high inflation and increasing interest rates. Sales of cars, utility vehicles and vans in calendar year 2022 are now expected to be 3.6-3.7 million units, 17-20% higher compared with last year's sales.