Jefferies initiates coverage on Marico with a 'buy'

Cites strong execution track record and sustained focus on developing new segments

Jefferies has initiated coverage on Marico Ltd with a 'buy' rating and a target price of Rs 254, citing strong execution track record and sustained focus on developing new segments.

"While there are headwinds arising from a broad-based slowdown, we believe the company is well placed to grow earnings by over 20% per annum in the medium term," said Jefferies in a report.

The investment bank expects recent round of equity funding, and strong operating cash flow generation going forward to turn Marico net cash positive in FY14, therefore leading to strong earnings growth.