Equity Note on Marico Bangladesh Limited Date: 22nd June, 2017

Resistance: 1,021 MFI: 32.34

Current Price (BDT): BDT 1,010.0 Support: 989 RSI: 60.07
Company Fundamentals Company Overview
Market Cap (BDT mn) 31,783.5 Marico Bangladesh is one of the top three listed FMCG MNCs
Market weight 0.8% and they reach to their customers through a strong distribution
No. of Share Outstanding (mn) 31.5 network of 720,000 outlets.
Paid-up Capital (BDT mn) 315.0
Free-float Shares (Inst.+For.+Public) 10.0 Company Profile
3 Months Average Turnover(BDT mn) 1.7  Incorporation: September 6, 1999
3 Months Return 0.8%  Commercial operation commencement year: 2000
52-week price range (BDT) 899.0-1310.0  Key personnel: Saugata Gupta (Chairman), Naveen
Sector Forward P/E 20.0 Pandey (Additional Director and Managing Director) and
MARICO Forward P/E 21.9 Mohammad Iqbal Chowdhury (CFO).
MARICO P/NAVPS 20.0  Factories Location: Mouchak, Kaliakoir and Gazipur
(Factory 1), Shirirchala, Mahona Bhabanipur and Gazipur
2013- 2014- 2016-17
14 15
2015-16
(9m, An)
(Factory 2).
 Listing: August 9, 2009
Financial Information (BDT mn):  Shareholding Pattern:
Net Sales 6,435 7,118 7,339 7,229 Sponsor/ Gov.t Institute Foreign Public
Operating Profit 1,587 1,728 1,810 2,050 Director
Profit After Tax 1,386 1,345 1,414 1,594 As on May 31, 2017 90.00% 0.00% 2.85% 6.06% 1.09%
Assets 3,674 3,354 3,467 3,038 As on Dec 31, 2016 90.00% 0.00% 9.09% 0.00% 0.91%
Equity 1,706 1,712 1,709 1,321 As on Dec 31, 2015 90.00% 0.00% 9.24% 0.00% 0.76%
Ret. Earnings 1,139 1,145 1,142 754 Business Profile
Cash 46 192 481 207
Products Category & Existing Brand of Marico:
Dividend (C/B)% 900/0 425/0 450/0 -
Margin: Category Brands
Gross Profit 49.3% 46.5% 47.1% 47.0% Branded Parachute
Operating Profit 24.7% 24.3% 24.7% 28.4% Coconut Oil
EBITDA 27.5% 27.0% 27.5% 30.3% (BCNO)
Pretax Profit 29.2% 25.7% 26.2% 29.4% Value added Hair 1. Parachute Advanced Beliphool,
Net Profit 21.5% 18.9% 19.3% 24.2% Oil (VAHO) Extra Care, Enriched Hair Oil, Cooling
Growth: Hair Oil.
2. Nihar Natural Shanti Badam Amla
Sales 5.2% 10.6% 3.1% -1.5%
Gross Profit 43.7% 4.3% 4.5% -1.6% Hair Dye Hair Code, Code Active and Keshkala
Operating Profit 35.7% 8.8% 4.7% 13.3%
Hair Serum Livon Silky Potion
Net Profit 59.8% -2.9% 5.2% 23.8%
Profitability: Male Grooming Set Wet Deos, Wet Hair Gel
ROA 31.3% 38.3% 41.5% 53.8% Shampoo Mediker Plus
ROE 57.0% 78.7% 82.7% 115.5%
Skin Care Parachute advanced body Lotion, Bio Oil
Payout Ratio 205% 99.6% 100.2% -
PEG Ratio 2.4 (0.1) 0.2 1.3 Edible Oil & Saffola Active & Massala Oats.
Leverage: foods
Debt Ratio 40.5% 0.0% 0.0% 0.0% Revenue decomposition:
Debt-Equity 87.2% 0.0% 0.0% 0.0% Revenue Decomposition of Marico Bangladesh in FY2016
Altman Z-score 14.5 21.1 18.2 16.4 & 2015
Valuation: 2016 2015
Parachute Coconut Oil 78.88% 81.07%
Price/Earnings 25.2 33.5 28.0 18.2
VAHO 14.02% 12.36%
Price/BV 20.4 26.3 23.2 24.1
Haircode 1.35% 1.65%
EPS (BDT) 20.4 26.3 23.2 22.0
Saffola- Edible Oil 0.23% 0.25%
DPS 90.0 42.5 45.0 - Parachute body lotion 0.96% 0.23%
NAV per share 54.1 54.3 54.2 41.9 Others 4.56% 4.44%
EV/EBITDA
(BDT) 19.7 23.3 19.4 14.4
EV/Sales 5.4 23.4 21.5 23.3
*Financial data of 2016-17 has been annualized based on latest nine
months data.

1 EBL Securities Limited Research

 Equity Note on Marico Bangladesh Limited
Current Price (BDT): BDT 1,010.0
Production Capacity:
Major Unit of Budgeted capacity during
Product Measure the year
BCNO KL 30,050
VAHO KL 5,400
Copra Ton 30,500
Industry Overview
Fast Moving Consumer Goods (FMCG) is one of the largest
sector of the economy that contributes significantly to the GDP
of Bangladesh. The demand of this sector is sensitive and
affected largely by consumer confidence driven by economic
growth condition.
Major Products: Personal care goods, household care goods,
packaged foods and beverages etc.
Market Scenario: Growth of market size of this sector is mostly
dependent on population growth in the economy and also the
income condition (purchasing power) of consumers. Political
unrest affected the performance of this sector which is reviving
slowly in current period. Though the economy has been
upgraded from lower income country to middle income
country, it still holds many weak spots that require
improvement. These economy challenges (major challenges
are weak business confidence and weak propensity of
spending) are making large obstacles on the way of growth of
FMCG industry. Though there are more than 60 companies in
FMCG, large manufacturing companies like Marico Bangladesh
limited, Uniliver Bangladesh Limited, and Reckitt Benckiser
Limited etc. act as key players of the market. Establishment of
business in this sector requires low capital and low complexity
which is opening this sector to new entrants and thus increases
the competition. Products differentiation is highly needed for
these products.
The whole target market is divided into two segments based on
spending nature- Urban & rural. As the competition in the
industry is so intense, differentiation is the most useful weapon
to maintain sustainability and the companies differentiate their
goods considering these two segments.
Date: 22nd June, 2017
Resistance: 1,021 MFI: 32.34
Support: 989 RSI: 60.07
to 10% volume growth through favorable lower food
inflation. He also mentioned that the value growth will
be kicked up in Q4 considering down pattern of deflation
trend and it will be reflected in the earnings of FY18 Q1.
The company is planning to reduce the revenue
contribution by Parachutes & increase the contribution
by VAHO to ensure diversification of their portfolio.
 The company is focusing on implementation of prominent
lean manufacturing tools & align in best practice soon.
This practice will help the company to reduce their
operational cost which is important to face the recent
price hike in raw materials cost. Along with this the
company is focusing on transformation of GTM (Go to
Market) Strategy to Centres of Excellences (COE) strategy.
Investment Concern
 Price hike in major raw materials Copra & introduction of
GST are making a cost pressure on overall operational
cost rising it from 10% to 12% which is reducing the profit
margin as well. Furthermore, in the recent budget
custom duty on Copra has been proposed to be 5.0%
which was 0.0% earlier. Most of the raw materials are
imported by the company which is exposing the business
to exchange rate risk. Exchange rate fluctuation can affect
their operational cost significantly. Besides, The Company
is also exposed to input risk as Copra comprises a bulk of
their raw materials.
 As the sector comprises of very low entrant’s barriers, it
results in intense competition among the industry players.
This factor is making almost permanent cost pressure for
the company.
Years EPS (BDT) and EPS Growth of Marico Bangladesh
60.00
LTD
EPS Growth 80.00%
50.00 60.00%
40.00 40.00%
30.00 20.00%
20.00 0.00%
10.00 -20.00%
2013-14 2014-15 2015-16 2016-17 (A)
*Financial data of 2016-17 has been annualized.

FMCG Sector in Bangladesh Capital Market: Quarterly (3 Months) Restated EPS (in BDT)
TICKER Paid-up capital Forward PE Price to NAVPS
GLAXOSMITH 120 25.1 6.4 14.8 14.4 14.2 13.6
13.2 12.7 12.7
KEYACOSMET 8,351 7.3 0.9 10.6 11.0 10.3 10.2
9.1 9.0
KOHINOOR 122 40.3 9.8 6.2
7.5

RECKITTBEN 47 32.8 24.6

MARICO 315 21.9 20.0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2013-14 2014-15 2015-16 2016-17
Investment Insight
Company Positive
Profitability Margin of Unique Hotel & Resorts Ltd.
 The company has launched two new product lines- GP Margin OP Margin PBT Margin NPAT Margin
Parachute Advanced Extra Care and Parachute Advanced 47.1% 47.0%
46.5% 28.4%
Body lotion last year and has already been able to earn 50.0%
great encouragement. The company has also launched 40.0% 26.2% 29.4%
24.3%25.7% 24.7% 24.2%
two other new brands- Safolla Masala Oats & Mediker 30.0% 18.9% 19.3%
Plus and Bio-Oil (distribution only) in 2016. All these 20.0%

efforts have been made to introduce a well-diversified 10.0%

0.0%
product portfolio. 2014-15 2015-16 2016-17 (A)
 According to Management, the consumption recovery *Financial data of 2016-17 has been annualized based on last available data of
will happen by the middle of the year which will lead 8% HY

2 EBL Securities Limited Research

Equity Note on Marico Bangladesh Limited Date: 22nd June, 2017
Resistance: 1,021 MFI: 32.34
Current Price (BDT): BDT 1,010.0 Support: 989 RSI: 60.07
EPS Multiplier Value(BDT)
Price Volume Movement of Marico Bangladesh
(BDT)
Limited
VOLUME CLOSEP* Peer Forward P/E 55.6 26.4 1466.5
2,000 102000
Peer Trailing P/E 45.4 23.7 1074.9
1,700 82000
Sector Forward P/E 55.6 20.0 1112.0
1,400
62000
*P/E ratio has been calculated based on Current date closing price of the date
1,100
42000
**GLAXOSMITH, KEYACOSMET, KOHINOOR and RECKITTBEN have been
800 considered as peer.
500 22000
Concluding Remarks:
200 2000
Jan-15 Jun-15 Nov-15 Apr-16 Sep-16 Feb-17 Though the price hike of raw materials is affecting the
operational cost of the company, the company has managed to
increase their revenue through some recent efficiency
improvement steps. It is expected that the company will
maintain this earning growth this year too

Statement of Consolidated Income

Particulars 2012-13 2013-14 2014-15 2015-16 2016-17 Ann.

Net Turnover 6,119,893,866 6,434,826,084 7,117,757,407 7,339,285,874 7,228,653,235
Cost of Sales 3,912,943,094 3,263,927,064 3,811,531,905 3,884,804,007 3,828,963,709
GROSS PROFIT 2,206,950,772 3,170,899,020 3,306,225,502 3,454,481,867 3,399,689,525
Other Operating Income/(Expenses) 221,916,699 3,696,318 844,066 2,468,764 1,478,744
Total Operating Income 2,428,867,471 3,174,595,338 3,307,069,568 3,456,950,631 3,401,168,269
Operating Expenses: 1,258,876,522 1,587,143,277 1,579,233,287 1,647,341,456 1,350,996,201
Administrative & other expenses 504,086,748 722,683,627 636,462,886 735,664,847 792,261,653
Distribution expenses 754,789,774 864,459,650 942,770,401 911,676,609 558,734,548
PROFIT FROM OPERATIONS 1,169,990,949 1,587,452,061 1,727,836,281 1,809,609,175 2,050,172,068
Financial Expenses 1,406,447 2,502,325 328,127
Interest Income 289,861,909 103,183,009 114,846,715 72,555,333
PROFIT BEFORE WPPF 1,169,990,949 1,875,907,523 1,828,516,965 1,924,127,763 2,122,727,401
PROFIT BEFORE TAX 1,169,990,949 1,875,907,523 1,828,516,965 1,924,127,763 2,122,727,401
Provision for Income Tax 302,641,818 490,299,658 483,747,430 510,077,456 528,241,149
PROFIT AFTER TAX FOR THE YEAR 867,349,131 1,385,607,865 1,344,769,535 1,414,050,307 1,594,486,252
Total Comprehensive Income for the Year 867,349,131 1,385,607,865 1,344,769,535 1,414,050,307 1,594,486,252
TOTAL PROFIT AFTER TAX FOR THE YEAR 867,349,131 1,385,607,865 1,344,769,535 1,414,050,307 1,750,256,764

Statement of Financial Position

Particulars 2012-13 2013-14 2014-15 2015-16 2016-17 Ann.

ASSETS
Non-Current Assets: 903,952,279 924,471,873 777,892,203 693,240,983 592,943,390
Property, Plant and Equipment-Carrying Value 836,558,863 883,065,876 731,713,275 595,760,075 500,641,046
Construction Work-in-Progress 28,157,695 11,148,115
Intangible Assets, net 6,017,122 7,284,910 13,142,320 10,336,353
long Term advanced & deposits 5,167,416 2,706,000 2,706,000
Deferred tax assets 39,235,721 24,240,760 33,726,602 81,632,588 79,259,991
Current Assets: 4,279,126,199 2,749,037,383 2,576,040,140 2,773,596,509 2,444,983,221
Inventories 1,021,556,368 919,281,099 1,822,852,895 1,262,292,780 1,226,699,615

3 EBL Securities Limited Research

Equity Note on Marico Bangladesh Limited Date: 22nd June, 2017
Resistance: 1,021 MFI: 32.34
Current Price (BDT): BDT 1,010.0 Support: 989 RSI: 60.07
Advances and Deposits 216,454,120 79,841,480 47,175,777 169,523,023 356,850,240
Advance Income Tax 920,345,408
Accrued Interest 55,018,956 75,131,935 14,021,076 13,458,959 15,041,191
Fixed Deposit 2,014,917,416 1,629,069,440 639,564,304
Short Term Investment 500,000,000 847,797,172 -
Cash and Cash Equivalents 50,833,931 45,713,429 191,990,392 480,524,575 206,827,871
TOTAL ASSETS 5,183,078,478 3,673,509,256 3,353,932,343 3,466,837,492 3,037,926,611
SHAREHOLDERS' EQUITY AND LIABILITIES:
Shareholders' Equity: 3,155,543,247 1,706,151,102 1,712,170,637 1,708,720,944 1,321,382,465
Ordinary Share Capital 315,000,000 315,000,000 315,000,000 315,000,000 315,000,000
Share Premium Account 252,000,000 252,000,000 252,000,000 252,000,000 252,000,000
Retained Earnings (Accumulated loss) 2,588,543,247 1,139,151,102 1,145,170,637 1,141,720,944 754,382,465
Non-Current Liabilities: 25,360,722 25,507,721 26,893,521 44,263,099 43,636,651
Liabilities for Gratuity and WPPF 15,956,603 17,691,442 20,465,488 35,250,107 35,250,107
Provision for Leave encashment 9,404,119 7,816,279 6,428,033 9,012,992 8,386,544
Current Liabilities: 2,002,174,509 1,941,850,433 1,614,868,185 1,713,853,449 1,672,907,495
Short Term finance 38,534,964 1,488,466,215 -
Trade Creditors 120,138,849 453,384,218 1,245,243,909 1,283,487,511 1,263,595,254
Provision for Income Tax 1,080,417,993 365,667,085 423,337,033 394,179,152
Liabilities for Expenses 433,481,827
Other Liabilities 73,134,697
Payable to holding company 256,466,179
Provision for gratuity 2,646,276 5,183,998 15,133,089
Provision for leave encashment 1,310,915 1,844,907
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 5,183,078,478 3,673,509,256 3,353,932,343 3,466,837,492 3,037,926,611

Key Financial Indicator

Particulars 2012-13 2013-14 2014-15 2015-16 2016-17

Liquidity Ratios:
Current Ratio 2.14 1.42 1.60 1.62 1.46
Quick Ratio 1.63 0.94 0.47 0.88 0.73
Cash Ratio 0.03 0.02 0.43 0.78 0.12
Operating Efficiency Ratios
Inventory Turnover Ratio 4.37 6.63 5.19 4.76 5.81
A/C Payable Turnover Ratio 23.30 11.38 4.49 3.07 3.01
Payables Payment Period (Days) 15.45 31.63 80.22 117.17 119.74
Total Asset Turnover 130.41% 145.31% 202.57% 215.20% 222.26%
Operating Profitability Ratios
Gross Profit Margin (GPM) 36.06% 49.28% 46.45% 47.07% 47.03%
Operating Profit Margin (OPM) 19.12% 24.67% 24.28% 24.66% 28.36%
Pre Tax Profit Margin 19.12% 29.15% 25.69% 26.22% 29.37%
Net Profit Margin (NPM) 14.17% 21.53% 18.89% 19.27% 24.21%
Return on Total Assets (ROA) 18.48% 31.29% 38.27% 41.46% 53.81%
Return on Equity (ROE) 30.12% 57.00% 78.68% 82.67% 115.52%
Leverage Ratios
Total Debt to Equity 1.20% 87.20% 0.00% 0.00% 0.00%
Debt to Total Assets 0.70% 40.50% 0.00% 0.00% 0.00%
Equity Note on Marico Bangladesh Limited Date: 22nd June, 2017
Resistance: 1,021 MFI: 32.34
Current Price (BDT): BDT 1,010.0 Support: 989 RSI: 60.07
Valuation Ratios
P/B (price to book) Ratio 10.19 20.47 26.34 23.23 24.05
Book Value Per Share 100.18 54.16 54.35 54.25 41.95
EPS 27.53 43.99 42.69 44.89 55.56
P/E Ratio 37.08 25.20 33.54 28.07 18.16
EPS Growth Rate - 59.75% -2.95% 5.15% 23.78%
Sales Growth Rate 1.39% 5.15% 10.61% 3.11% -1.51%
Gross Profit Growth Rate 47.28% 43.68% 4.27% 4.48% -1.59%
EBIT Growth Rate 51.68% 35.68% 8.84% 4.73% 13.29%
Net Income Growth Rate 61.93% 59.75% -2.95% 5.15% 23.78%
Total Asset Growth Rate 23.33% -29.12% -8.70% 3.37% -12.37%
DUPONT Analysis
Net Profit AT/Sales 14.17% 21.53% 18.89% 19.27% 24.21%
Sales/Total Assets 130.41% 145.31% 202.57% 215.20% 222.26%
ROA 18.48% 31.29% 38.27% 41.46% 53.81%
Net Profit AT/Total Assets 18.48% 75.44% 38.27% 41.46% 53.81%
Total Assets/Stockholders Equity 1.63 1.82 2.06 1.99 2.15
ROE 30.12% 137.43% 78.68% 82.67% 115.52%
Extended DUPONT Analysis
Net Profit/Pretax Profit 74.13% 73.86% 73.54% 73.49% 82.45%
Pretax Profit/EBIT 100.00% 118.17% 105.83% 106.33% 103.54%
EBIT/Sales 19.12% 24.67% 24.28% 24.66% 28.36%
Sales/Assets 130.41% 145.31% 202.57% 215.20% 222.26%
Assets/Equity 1.63 1.82 2.06 1.99 2.15
ROE 30.12% 57.00% 78.68% 82.67% 115.52%
Equity Note on Marico Bangladesh Limited Date: 22nd June, 2017
Resistance: 1,021 MFI: 32.34
Current Price (BDT): BDT 1,010.0 Support: 989 RSI: 60.07

DISCLAIMER
This document has been prepared by the Research Team of EBL Securities Limited (EBLSL) for information only of its clients
residing both in Bangladesh and abroad, on the basis of the publicly available information in the market and own research.
This document has been prepared for information purpose only and does not solicit any action based on the material contained
herein and should not be taken as an offer or solicitation to buy or sell or subscribe to any security. Neither EBLSL nor any of
its directors, shareholders, member of the management or employee represents or warrants expressly or impliedly that
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However all reasonable care has been taken to ensure the accuracy of the contents of this document. EBLSL will not take any
responsibility for any decisions made by investors based on the information herein.

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notice. All reasonable care has been taken to ensure the accuracy of the contents of this document and the author(s) will not
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