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MUMBAI : Shares of Marico gained as much as 10% on Monday after the FMCG major posted a net profit of Rs227 crore in the fourth quarter fiscal 2021, a growth of 14.1% from Rs199 crore in the year-ago quarter.

At 12.50 pm, Marico was trading at Rs448.70 up 9% from its previous close, while the benchmark index, Sensex lost 0.72% to 48,432.51

The company's revenue from operations during January-March quarter rose 34.5% to Rs2,012 crore from Rs1,496 crore, year-on-year. The revenue growth was backed by robust volume growth of 25% in the domestic business and constant currency growth of 23% the international business.

Operating profit increased 13.1% to Rs319 crore, while operating profit margins contracted 300 basis points (bps) to 15.9% during the quarter.

In international business, Bangladesh clocked 20% constant currency growth. Southeast Asia also reverted to positive territory with 13% constant currency growth. Middle East and North Africa (MENA) and South Africa also gained on a low base, the company said.

Analysts at Emkay Global Financial Services said Marico’s growth seems better than most peers and is likely to stay strong, driven by steady volumes and higher price actions.

"Increasing its FY22-23 revenue forecasts by 5-7% as higher margin pressure keeps the earnings largely unchanged. Management’s aggression and consistently improving volume performance are positives, it maintains Hold rating on the stock.

"However, a part of the optical growth was also due to a lockdown-affected base (however relatively stronger than most sectoral peers) and partial normalization of the historical skew in Q4 and Q1 revenues. Rural continued to lead the way in traditional trade, growing at 1.8 times of urban," Marico said in a press release.

Analysts at Motilal Oswal Financial Services believe ongoing volume growth momentum in each of its core segments and significantly high growth as well as targets in the Foods portfolio are encouraging for a business that had only a 6% sales cumulative annual growth rate (CAGR) over FY15-20—before reporting double-digit growth in FY21.

"At 42.1 times / 36.3 times FY22/FY23 estimated earnings per share (EPS) the stock appears to still provide a healthy upside potential over the next year, with a superior outlook versus most peers and a far less volatile international business, and has a buy rating on the stock," the brokerage firm said in a result update.

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