Marico Limited Vs Adani Wilmar Limited: In the span of an entire day, we use a lot of products from different brands to fulfill our needs. Some of which we cannot live without.
How About Investing in the Brands You Use Everyday? In this article, we will look at two of the largest FMCG companies in India. Keep reading to find out about the financials of Marico VS Adani Wilmar!
Industry Overview
The fast-moving consumer goods (FMCG) industry is the fourth largest sector in the Indian economy. Household and personal care products account for 50% of the sales in the industry, healthcare accounts for 31-32% and food and beverage accounts for the remaining 18-19%.
The FMCG industry in India has witnessed positive momentum post the initial disruption at the onset of the pandemic, growing 9.4 percent in the quarter ending March 2021 after growing by 7.3 percent in the preceding quarter.
According to IBEF, it is estimated that 40% of all FMCG consumption in India will be made online by 2022. The online FMCG market is forecast to reach US$ 45 billion in 2022 from US$ 20 billion in 2017.
Business Overview
Marico Ltd.
Marico Limited is one of India’s leading consumer goods companies operating in the global beauty and wellness categories. It has a presence in over 25 countries across Asia and Africa.
It has reached more than 126 million households in India. Further, it has plans to develop scale in the businesses in South East Asia, the Middle East, and Egypt.
The company got listed in 1996 in the Indian stock exchanges. Marico holds a 23% share of the international FMCG market. So far, it has reached around 5.3 Million retail outlets in India.
Adani Wilmar Ltd.
Adani Wilmar Ltd is a joint venture between the Indian multinational conglomerate Adani Group and Singaporean food processing and investment holding company Wilmar International Limited.
The company got listed in February 2022. It is one of the largest FMCG food companies in India to offer most of the essential kitchen consumers, including edible oil, wheat flour, rice, pulses, and sugar.
It owns the number 1 edible oil brand in India “Fortune”. It stood as the largest importer of crude edible oil. In addition to that, it is the largest manufacturer of lauric fat, castor oil, and basic oleochemical manufacturers in India.
Financial Metrics
In this section, we will have a look at the financials of both companies.
Marico Ltd vs Adani Wilmar Ltd: Revenue
Marico Ltd posted a revenue of Rs 8,048 Cr in FY21 which is 10.2% higher than the previous year and also saw domestic volume growth of 7%.
Adani Wilmar earned a total revenue of Rs 37,090 Cr in FY21 which is a 25.06% growth from the previous year.
| Revenue (Rs in Cr) | |||||
| 2017 | 2018 | 2019 | 2020 | 2021 | |
| Marico Ltd. (Rs in Cr) | 5,918.00 | 6,322.00 | 7,334.00 | 7,315.00 | 8,048.00 |
| (Revenue growth in %) | - | 6.83% | 16.01% | -0.26% | 10.02% |
| Adani Wilmar Ltd. (Rs in Cr) | 22,973.00 | 26,354.00 | 28,802.00 | 29,657.00 | 37,090.00 |
| (Revenue growth in %) | - | 14.72% | 9.29% | 2.97% | 25.06% |
Marico Ltd vs Adani Wilmar Ltd: Profitability
Adani Wilmar earned a net profit of Rs 6,545.61 Cr in FY21 up 65% from the previous year. As it is a newly listed company, the profit margins over the years are yet to be available for comparison.
However, the company has been able to maintain an operating profit margin of 4% consistently over the last 5 years.
The International FMCG company, Marico, has maintained an average Gross profit margin of 20.55% over the last 5 years. In addition to that, the company has been able to maintain an average net profit margin of 18.87% and bet profit margin of 14.28% in the last 5 years.
| Profit Margin ratios (Rs in Cr) | |||||
| 2017 | 2018 | 2019 | 2020 | 2021 | |
| Gross Profit Margin (%) | |||||
| Marico Ltd. | 21.23 | 19.33 | 19.48 | 21.77 | 20.93 |
| Adani Wilmar Ltd. | - | - | - | - | - |
| Operating Margin (%) | |||||
| Marico Ltd. | 19.7 | 17.92 | 17.69 | 19.86 | 19.2 |
| Adani Wilmar Ltd. | 3% | 4% | 4% | 4% | 4% |
| Net Profit Margin (%) | |||||
| Marico Ltd. | 13.72 | 13.08 | 15.43 | 14.25 | 14.92 |
| Adani Wilmar Ltd. | - | - | - | - | - |
Marico Ltd vs Adani Wilmar Ltd: How Much Are Investors Earning?
An investor provides capital to the company in the form of equity. This capital is utilized by the company for its operations to earn profit and generate returns for the stakeholders.
The Return on equity measures the company’s efficiency with which it is able to generate returns compared to the shareholders’ investment. Over the last 5 years, Adani Wilmar has maintained an average ROE of 37.31% compared to Marico who has an average of 20.5%.
The 5-year average Earnings Per Share of Marico Ltd is 7.6 which is higher than Adani Wilmar which has been able to maintain an average of only 3.88 so far.
Marico Ltd is a dividend-paying company as well which has an average 5-year yield of 1.63. The newly listed Adani Wilmar has not declared any dividend yet.
| Return ratios (Rs in Cr) | |||||
| 2017 | 2018 | 2019 | 2020 | 2021 | |
| Return On Equity (ROE) | |||||
| Marico Ltd. | 37.51 | 34.1 | 41.25 | 35.03 | 38.69 |
| Adani Wilmar Ltd. | 19.5 | 24.92 | 18.89 | 17.16 | 22.25 |
| Return On Capital Employed (ROCE) | |||||
| Marico Ltd. | 47.47 | 41.81 | 41.99 | 42.58 | 44.85 |
| Adani Wilmar Ltd. | 17.94 | 21.99 | 26.21 | 26.69 | 23.1 |
| Earnings Per Share (EPS) | |||||
| Marico Ltd. | 6.19 | 6.31 | 8.64 | 7.91 | 9.09 |
| Adani Wilmar Ltd. | 2.04 | 3.57 | 3.39 | 4.03 | 6.37 |
| Dividend Yield | |||||
| Marico Ltd. | 1.19 | 1.3 | 1.38 | 2.46 | 1.82 |
| Adani Wilmar Ltd. | 0 | 0 | 0 | 0 | 0 |
Marico Ltd vs Adani Wilmar Ltd: How Does The Valuation Of The Company Look?
The price-to-earnings ratio helps investors understand the valuation of the company. Marico Ltd has maintained a 5-year average P/E of 43.85, the industry PE being 55.79.
The interpretation can be that the company is undervalued. The historical P/E ratios of Adani Wilmar are not available as it has been listed recently.
The EV/EBITDA helps in measuring the company’s value to its cash earning positions. The lower the average the better. The 5 year average of Marico is 29.87 and Adani Wilmar is 1.1.
| Valuation Parameter (Rs in Cr) | ||||||
| 2017 | 2018 | 2019 | 2020 | 2021 | ||
| Price to Earnings Ratio (PE) | ||||||
| Marico Ltd. | 47.57 | 51.68 | 39.98 | 34.73 | 45.29 | 43.85 |
| Adani Wilmar Ltd. | 0 | 0 | 0 | 0 | 0 | 0.00 |
| Price to Book Value (P/B) | ||||||
| Marico Ltd. | 16.39 | 16.61 | 15.06 | 11.83 | 16.53 | 15.28 |
| Adani Wilmar Ltd. | 0 | 0 | 0 | 0 | 0 | 0.00 |
| EV/EBITDA | ||||||
| Marico Ltd. | 30.23 | 34.63 | 31.03 | 22.29 | 31.15 | 29.87 |
| Adani Wilmar Ltd. | 2.32 | 1.25 | 0.6 | 0.69 | 0.58 | 1.09 |
Future Prospects Of The Company
Marico Ltd.
As part of their climate action goals, they aim to transition the operations of all facilities to carbon-neutral status and mitigate value chain climate impact. Over 72% of the Company’s energy needs are met from renewable energy sources.
Furthermore, Marico is also focusing on growing its D2C portfolio with its digital-first brands such as Beardo, Just Herbs (acquired recently), Coco Soul, and Pure Sense.
Adani Wilmar Ltd.
Adani Wilmar’s future growth strategy is focusing on value-added products with the launch of edible oil products, rice bran health oil, fortified foods, ready-to-cook soya chunks, khichdi, and more.
With a strong raw material base and market leadership, the newly listed company has a lot of potentials to grow.
In Closing
In this article, we had a look at Marico VS Adani Wilmar. Both the companies are giving neck-to-neck competition to each other.
Moving forward, Marico and Adani Wilmar both have plans and strategies ready to grow and diversify. That’s all for this post on “Marico Limited Vs Adani Wilmar Limited”. Happy Investing! Have you invested in either of the companies? Let us know in the comments.
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