Marico is a leading consumer goods company based in India, renowned for its innovative and high-quality products in the personal care, health, and wellness sectors. Founded in 1990, the company has built a strong portfolio that includes well-known brands like Parachute, Saffola, and Livon. With a commitment to sustainability and a focus on consumer needs, Marico emphasizes research and development to create products that enhance everyday life.
The company’s global presence, spanning multiple countries, showcases its dedication to quality and customer satisfaction, making it a trusted name in the FMCG industry.
Share Price
Marico share price: Shares of fast-moving consumer goods (FMCG) company Marico surged as much as 9.30 percent to hit an intraday high of Rs 687.30 per share on Wednesday, October 30, 2024. The Marico share price rallied after the company posted stronger-than-expected Q2FY25 results, which beat street estimates.
Results
In Q2FY25, Marico’s profit rose over 20.3 percent year-on-year (Y-o-Y) to Rs 433 crore, as against Rs 360 crore in the same quarter a year ago (Q2FY24). The company’s revenue from operations climbed 7.6 percent annually to Rs 2,664 crore in Q2FY25, from Rs 2,476 crore in the same quarter last year (Q2FY24).
On the operating front, earnings before interest, taxes, depreciation, and amortization (EBITDA) soared 5 percent annually to Rs 522 crore in the September quarter of FY25, from Rs 497 crore in the September quarter of FY24. However, EBITDA margin squeezed 50 basis points (bps) Y-o-Y to 19.6 percent in Q2FY25m from 20.1 percent in Q2FY24.
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Outlook
The company expects demand trends to improve in the second half of the year, supported by favorable monsoon conditions and government investments in rural economies. It aims for double-digit revenue growth and enhanced margins, focusing on market share gains and expansion in the Foods and Premium Personal Care sectors, alongside international growth.
What do brokerages say?
According to Japanese brokerage firm Nomura, Marico guides for double-digit sales growth in FY25F (7 percent in H1), while OPM will contract by 40-50 basis points Year over Year but improve in FY26 from Project Setu. Hence, analysts have trimmed FY25F-27F EPS by about 2.5 percent on our lower OPM outlook. “We value MRCO at a P/E of 50x on Sep-26F EPS (both unchanged) and arrive at a TP of Rs 760 (Rs 780 previously). We maintain our Buy rating and Top Pick status and forecast a 14 percent EPS CAGR over FY25-27F,” Nomura said. The key risk, they believe, is slower-than-expected demand recovery.
- Trade Brains Target Price: Rs. 821
- Upside Potential: 25.17%
- CMP: Rs. 653
Rationale: Management anticipates double-digit revenue growth in the second half of FY25, with operating margins expected to gradually improve over the next few years. In July 2024, Marico formed a strategic partnership with Kaya Limited, a leading provider of dermatological solutions, this partnership will allow Marico to scale Kaya’s efficacy-based personal care products beyond its clinics.
Written By: Dipangshu Kundu
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