In today’s briefing:
- Allied Blenders and Distillers Pre-IPO Tear Sheet
- Marico Ltd – Weak Consumption Trends Weigh on 1QFY23 Volume
Allied Blenders and Distillers Pre-IPO Tear Sheet
- Allied Blenders and Distillers (ABD) is looking to raise about US$250m in its upcoming India IPO. The deal will be run by ISec, Axis, JM Fin, Kotak and Equirus.
- ABD is the largest Indian-owned Indian-made foreign liquor (IMFL) company and the third largest IMFL company in India, in terms of annual sales volumes between FY14 and FY21.
- It had a market share of 8.2% in the IMFL market by sales volumes in FY21. Its products are retailed at over 64,000 outlets in India.
Marico Ltd – Weak Consumption Trends Weigh on 1QFY23 Volume
- Tepid demand leads to mid-single-digit volume decline in India business: MRCO’s domestic business (~77% of revenue) saw mid-single-digit volume decline in 1QFY23, largely dragged by a sharp drop in Saffola Oils, which had high in-home consumption in the base quarter and also witnessed significant downtrading from super premium to mass segment in Edible Oils.
Gross margins to stay flat sequentially: Trends seen in certain key raw materials for MRCO in 1QFY23: (i) Copra prices remained soft, (ii) Edible and crude oil prices cooled off to some extent towards the end of the quarter.
View & Valuation: Barring the recent quarters (affected by overall deceleration in market demand), MRCO’s core portfolio has delivered a strong performance and the company continues to make efforts towards meeting its medium-term growth aspirations.
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