Target: ₹678
CMP: ₹591
Marico is a leading Indian FMCG company with exports to over 25 countries. The company’s product portfolio includes brands such as Parachute, Saffola and Livon.
In Q2FY25, Marico’s revenue increased 7.6 per cent yoy to ₹2,664 crore, as underlying volume grew 5 per cent in the domestic business and revenue in constant-currency terms rose 13 per cent in the international business.
The company expects double-digit revenue growth in H2FY25 in both India and International business.
The company performed well during the quarter, mainly aided by strong volume growth in the domestic rural market and expected to support further in the upcoming quarter. Marico expects H2FY25 domestic and international business to grow by double digits, which indicates better performance in the near future.
However, cost price is expected to be higher due to a rise in input cost, which could dent its margin. Additionally, uncertainty in international business (in Bangladesh) is expected to limit its overall performance in the short term. Hence, cautiously we downgrade our rating on the stock to Accumulate with a revised target price of ₹678 based on 48x FY26E adjusted EPS.