MARICO LTD.

I like this stock. I have held the stock for more than 5 years now and have added more in these years. The last I added it, it was at 55 (post split). It is a wonderful company. It does what I like and search for in a company - innovate. I hardly buy a stock unless I see evidence of innovation. But there is one primary reason that I continue to hold the stock even today and have the balls to recommend it at this price. Read on.

Retailing is a good business to be in - that is evident from the prices of the few scrips that are successful in this business. But retailing is a high volume low margin business. So, when there is enough competition I do not see these stocks doing too well. BUT EVER HEARD OF A HIGH VOLUME HIGH MARGIN RETAILING? WELL THAT IS WHAT MARICO CAN BE ALL ABOUT!

Kaya Skin Clinic is a unit of Marico and with passing years is becoming quite successful too. It already breaking in and turning small profits which are slated to grow phenomenally in the coming years. Now beauty is something that everything wants even if it be skin deep. That is where the high volumes come in. Also, beauty is concept and all concepts are sold always at high margins. You only need to go to your neighborhood beauty shops to find out the truth about this. And when it comes to Marico, the margins are higher still. So, while its hair-care business is doing really well and while its acquisitions (brands and companies) abroad are adding value to its business, it is this high volume high margin business that has attracted me.