CASE STUDY ON MARICO - Drashti Panjrolia

SUCCESS STORY OF MARICO

With 7,334 crore - 16% y-o-y growth consolidated turnover in FY-19 , 930 CR 14% Y-O-Y consolidated PAT, 1018 cr cash generated from operations in FY 19 and 613 cr. Net surplus in FY-19 ; Marico Limited is one of India's leading consumer goods companies providing consumer products and services in the areas of health, beauty and wellness. With its headquarters in Mumbai, Maharashtra, India, Marico is present in over 25 countries across emerging markets of Asia and Africa.

•The organisation holds a number of household brands such as Parachute, Parachute Advanced, Saffola, Hair & Care, Nihar, Nihar Naturals, Livon, Set Wet, Mediker and Revive. In the international market, Marico is represented by brands like Parachute, HairCode, Fiancée, Caivil, Hercules, Black Chic, Code 10, Ingwe, X-Men and Thuan Phat.

•Male grooming – Set Wet

 ( 60% value market share and leader in hair creams and gels segment)

•Hair Care – Parachute, Parachute Advanced, Nihar Naturals, Nihar Naturals Uttam, Hair & Care Fruit Oils, Mediker, Livon

( Premium hair nourishment market- INR 1.9 Bn )( hair oil market - USD 1.1 Bn)

•Edible Oils – Saffola (73% volume market share)

Skin Care – Parachute Advansed Body Lotion

Fabric Care – Revive

Healthy Foods – Saffola Masala Oats & Saffola Fittify.

STRENGTHS

•The company has shown a good profit growth of 17.87% for the Past 3 years.

•Company has been maintaining healthy ROE of 29.94% over the past 3 years.

•Company has been maintaining healthy ROCE of 35.43% over the past 3 years.

•Company is virtually debt free.

•Company has a healthy Interest coverage ratio of 99.92.

•Company’s PEG ratio is 0.77.

•The company has an efficient Cash Conversion Cycle of 44.33 days.

•Company has a healthy liquidity position with current ratio of 2.41.

•The company has a high promoter holding of 59.60%.

Limitations

•The company has shown a poor revenue growth of 7.10% for the Past 3 years.

•Tax rate is low at 4.63.

•The company is trading at a high EV/EBITDA of 31.17.

HISTORY

• In 1971 -Harsh Mariwala, a young graduate, joins the family business - Bombay Oil Industries

• In 1974 -Harsh envisions a branded FMCG market for coconut and refined edible oils in small consumer packs and sets up a national distribution network for Parachute

•In 1980-The ubiquitous Parachute blue bottle makes its first appearance in Harsh's first innovation. Traditional tin packs are replaced by plastic packs, pioneering an industry wide shift

•Marico is born. 2nd April 1990

• In 1991-Marico launches Hair & Care a non-sticky hair oil repositioning the market leader through contemporary packaging. Sweekar sunflower oil goes national.

•In 1994 - Revive cold water starch makes starching cottons more convenient for the Indian consumer. Another innovation

•In 2002- India's first unisex top-of-the-line dermatology led clinics. Marico ventures into skin care solutions from FMCG.

• In 2006- Nihar enters Marico's fold

• In 2011 -Parachute Advansed entered the skin-care category with the launch of Parachute Advansed Body Lotion (PABL), another innovation by Marico.

•In 2012- Get SetWet and Go...

India's Gen Next gets styled by Marico

INTERNATIONAL PORTFOLIO

1. Bangladesh 46%

2. Vietnam 22%

 3. Middle East 11%

4. South Africa 8%

5. Egypt 4% 

THINGS TO LEARN FROM MARICO

1. BOUNDARYLESSNESS

Seeking support & influencing others beyond the function & organisation to achieve a better outcome/ decision without diluting one's accountability.

2  OPPORTUNITY SEEKING

Identifying early opportunity signals in the environment to generate growth options.

3  INNOVATIONS

Experimentation and calculated risk taking to increase success probability of radical/ pioneering ideas to get quantum results.

4. TRANSPARENCY AND OPENNESS

Allowing diversity of opinion by listening without bias, giving & receiving critique, with mutual respect and trust for the other.

5. CONSUMER CENTRIC

Keeping consumer as the focus and a partner in creating and delivering solutions.

6  BIAS FOR ACTION

Preference for quick thoughtful action as opposed to delayed action through analysis.

7. EXCELLENCE

Continuous improvement of performance standards and capability building for sustained long term success.

8  GLOBAL OUTLOOK

Sensitivity and adaptability to cultural diversity and learning from different cultures.

9 . BRANDS WITH PURPOSE

•Nihar shanti amla "chote kadam Pragati ke aur"

• saffolalife "chote kadam- dil k bade kaam ke"

10. FIRST MOVER ADVANTAGE

They knew that tin cans selling oils are expensive in nature. They started selling spill proof plastic oil containers!! 

NEXT TIME WHEN YOU BUY COCONUT OIL ! REMEMBER THEIR LEARNINGS!