m a r i c o uncommon sense

By: Yash SuranaBy: Yash Surana

C O N T E N T SC O N T E N T S

HISTORYHISTORY MANAGEMENTMANAGEMENT PRODUCTSPRODUCTS TURNING POINT IN THE HISTORY OF TURNING POINT IN THE HISTORY OF

THE COMPANYTHE COMPANY FINANCIAL PERFORMANCEFINANCIAL PERFORMANCE COMPETITORSCOMPETITORS FUTUREFUTURE

H I S T O R YH I S T O R Y

1862 - Kanji Morarji, started a small trading business in Mumbai

Bombay Oil Industries Ltd (BOIL) in 1948

Manufacturing Facilities - coconut oil extraction plant, vegetable oil

refinery and a chemical plant

1990 - marketing division was hived off into a separate company in Marico

Industries Ltd (MIL)

Marketing - coconut oil, edible oil, instant starch, fruit jams etc including

the brands Saffola and Parachute

Marico's brands and their extensions have occupied leadership positions

with significant market shares in all categories- Coconut Oil, Hair Oils,

Anti-lice Treatment, Premium Refined Edible Oils, Fabric Care etc.

the philosophy that will build the culture to drive business growth

an organization - which is flat with only five levels of reporting between the

Managing Director and an operator on the shop floor

Marico's structure is dynamic and constantly evolving

Business ModelBusiness Model

heightened sensitivity to consumer needsheightened sensitivity to consumer needs

setting new standards in the delivery and quality of products and services setting new standards in the delivery and quality of products and services

through processes of continuous learning and improvementthrough processes of continuous learning and improvement

model ensures that Marico is present in unique / ethnic Indian Product or model ensures that Marico is present in unique / ethnic Indian Product or

Services categories where typical MNCs would not be strongServices categories where typical MNCs would not be strong

M A N A G E M E N T

Mr. Harsh Mariwala Chairman & Managing Director (Promoter)

Mr. Rajeev Bakshi Non-Executive and Independent

Mr. Atul Choksey Non-Executive and Independent

Mr. Nikhil Khattau Non-Executive and Independent

Mr. Jacob Kurian Non-Executive and Independent

Mr. Rajen Mariwala Non–Executive (Promoter)

Ms. Hema Ravichandar Non-Executive and Independent

Mr. Bipin Shah Non-Executive and Independent

M A N A G E M E N T

safe and effective procedures - enhance the look and feel of the skin

scientific, unisex dermatological procedures

US FDA approved technology

P R O D U C T S

line of luxury Ayurvedic skin care products super-premium outlets, specialty stores, Spa

channels, internet winner of Fashion Group International Award in

2001

P R O D U C T S

premium edible grade oil positioning – purity loosely available commodity to a path-breaking

brand communication has evolved over time to appeal to

different consumer sets

P R O D U C T S

concern today is the occurrence of heart disease with every fourth Indian being under the threat

fortified with natural vitamin E - preserves the stability of oil, increases its shelf-life, retard aging and prevents heart disease

P R O D U C T S

a three-decade-old brand - acquired from Procter & Gamble, in July 1999, in the shampoo format

treating lice primary target - mothers of school-going

children (urban/rural)

P R O D U C T S

post wash hair conditioner primary target - female between 18-34 yrs,

SEC AB prevalent in the urban sections, single use , single use

sachet pack - rural marketsachet pack - rural market

P R O D U C T S

instant Cold Water Starchinstant Cold Water Starch the ONLY product of its kindthe ONLY product of its kind created a market for Instant starch, when created a market for Instant starch, when

there was nonethere was none

P R O D U C T S

pleasantly perfumed non-sticky hair oilpleasantly perfumed non-sticky hair oil positioning - the lightest perfumed hair oil offering positioning - the lightest perfumed hair oil offering

both “Style & Nourishment”both “Style & Nourishment” enriched with “Herbal Proteins” which are enriched with “Herbal Proteins” which are

extracted from Neem & Tulsi, a process patented extracted from Neem & Tulsi, a process patented by Maricoby Marico

P R O D U C T S

Refined Sunflower OilRefined Sunflower Oil positioning - as a 88% saturated, fat-free positioning - as a 88% saturated, fat-free

oil with Low Absorb propertiesoil with Low Absorb properties primary target has been housewives (age primary target has been housewives (age

25 +)25 +)

P R O D U C T S

wide range of great tasting products such wide range of great tasting products such as Jams, Sauces, Baked Beans, Chinese as Jams, Sauces, Baked Beans, Chinese Vinegar, Sweet Corn Soup, MayonnaiseVinegar, Sweet Corn Soup, Mayonnaise

No.2 brand in the Jams categoryNo.2 brand in the Jams category

P R O D U C T S

premium quality edible grade coconut oilpremium quality edible grade coconut oil brand is one of Marico's recent acquisitions, brand is one of Marico's recent acquisitions,

having been bought in November 1999having been bought in November 1999 consumer franchise spans women of all age consumer franchise spans women of all age

groupsgroups

strong rural presencestrong rural presence

P R O D U C T S

launched on the platform of “Goodness of launched on the platform of “Goodness of Badam with Amla”Badam with Amla”

positioning – value for moneypositioning – value for money

P R O D U C T S

making over Marico from a closely held family making over Marico from a closely held family managed firm to a highly professionally managed firm to a highly professionally managed organization – Harsh Mariwalamanaged organization – Harsh Mariwala

Mediker, a brand acquired from Procter & Mediker, a brand acquired from Procter & Gamble for Rs. 10 croreGamble for Rs. 10 crore

scale economies and a well-thought out pricing scale economies and a well-thought out pricing strategy in 2000 - 01strategy in 2000 - 01

T U R N I N G P O I N T I NH I S T O R Y O F C O M P A N Y

F I N A N C I A L P E R F O R M A N C E

Period ending (months) 31-Mar-2006 (12) 31-Mar-2005 (12) 31-Mar-2004 (12)

Net sales 10449.10 9373.70 8365.65

Other Income 37.10 10.20 66.22

Total Income 10486.20 9383.90 8431.88

Cost of goods sold 9058.10 8536.50 7679.35

OPBDIT 1428.10 847.40 752.53

PAT 988.60 737.90 579.98

Gross Block - 1614.30 1448.97

Equity capital - 580.00 290.00

EPS (Rs.) - 12.72 20.00

DPS (Rs.) - 5.35 8.50

BV (Rs.) - 37.46 61.96

P/E range (x) - 0.0 - 0.0 0.0 - 0.0

Debt / Equity (x) - 0.24 0.05Operating margin (%

of OI) 13.6 9.0 8.9

Net margin (% of OI) 9.4 7.9 6.9

F I N A N C I A L P E R F O R M A N C ETHE STOCK EXCHANGE MUMBAI (BSE)

QUARTER ENDED

HIGH * LOW * CLOSING * MARKET CAPITALISATION

**

AVG. VOLUMES

PER DAY ***

Mar. 31 2004

301 210 260 7540 199

Mar. 31 2005

259 161 243 14094 424

Mar. 31 2006

578 366 539.75 3132 255

* In Rupees per share of Rs. 10 each** In INR Million*** Number of shares ('00)# The price adjusted for dividends and splits.

C O M P E T I T O R S

Amar Remedies LimitedAmarshiv Opticals LimitedColgate-Palmolive (India) LimitedDabur India LimitedFem Care Pharma LimitedGillette India LimitedGodrej Consumer Products LimitedGodrej Industries LimitedGujarat Meditech LimitedHenkel India LimitedHenkel Spic India LimitedHindustan Lever LimitedHipolin LimitedIdeal Optics LimitedJ L Morison (India) Limited

Jyoti Cosmetics (Exim) LimitedMuller & Phipps (India) LimitedMy Fair Lady LimitedNirma LimitedParamount Cosmetics (India) LimitedParikh Herbals LimitedPee Cee Cosma Sope LimitedProcter & Gamble Hygiene And Health Care LimitedReckitt Benckiser (India) LimitedShikhar Leasing and Trading LimitedShri Niranjan Ayurved Bhavan LimitedSwastik Surfactants LimitedVEL Software LimitedVashisti Detergents Limited

F U T U R E

MARICO YESTERDAY (1991) MARICO TODAY (2005)

A sales turnover of Rs. 1059 million A sales turnover of Rs. 10128 million

Profit after tax of Rs. 24 million Profit after tax of Rs. 701 million

Net worth of Rs.33 million Net worth of Rs.2169 million

Two products with brand names -

Parachute and Saffola12 Brands, 3 of which are Market Leaders

Two factories - a coconut oil plant 7 Factories and sub - contract facilities

Around 400 employees A total strength of around 1000 members

The immediate plan is to expand business in a focused, de-risked manner by

using newer channels of distribution and launching new skin care treatments and

products.

With its continuous efforts to move up the value chain, Marico has been

contemplating entering the hair wash segment through Parachute Shampoo.

Re-launch existing brands such as Parachute, Shanti Amla and Mediker

Parachute came in a new pack

Mediker was incorporated with natural ingredients such as neem,

camphor and coconut oil to fight lice

F U T U R E

T H A N KY O U