Prabhudas Lilladher: Out Performer - Marico

According to brokerage house, the acquisition has been a positive step by Marico and, with the increase in size, would aid in improving margins. This acquisition would also help the company strengthen its presence in Egypt and neighbouring markets. The acquisition could also act as a platform to promote its Indian-made products in these markets due to access to the distribution network and better understanding of the markets. Further, the possibility of writing off the acquisition might prove to be a booster for EPS growth.

"At the CMP of Rs 540, Marico trades at 24.5x FY07E earnings and 20.6x FY08E earnings. With the improved margins and the display of the company's brand strength in the hair care segment, the stock has been re-rated."

Click here to read the complete report.