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Shares of Marico Ltd. gained as much as 5% on Monday, May 5, after most analysts covering the FMCG major either upgraded the stock or raised their price targets following its March quarter results. The company reported largely in-line Q4 earnings, in-line with its quarterly update.
Marico reported a volume growth of 7% for the January-March quarter, higher than expectations of a 5% to 6% growth from last year. Its revenue rose 20% from the same quarter last year to ₹2,730 crore. However, EBITDA margin narrowed over 250 basis points to 16.8% as against estimates of 17.4% and 19.4% in the year-ago quarter.
In FY26, Marico expects to sustain double-digit revenue growth and will strive to deliver double-digit operating profit growth. In FY26, annualised volume growth is likely to be over 5%.
Brokerage firm Ambit has maintained a 'Buy' rating on Marico and raised its price target to ₹766 from ₹736 per share earlier. The brokerage said that Marico reported 20% revenue growth in the March quarter, marginally ahead of Street estimates.
The performance of Marico’s core portfolio was mixed — Parachute posted 1% volume growth and 22% value growth, while Saffola edible oil growth improved to 26%. VAHO (Value-Added Hair Oils) turned positive at 1%.
Marico also reported market share gains of 70 basis points in Parachute and 120 basis points in VAHO.
Ambit's estimates for FY26 factor in 11% growth. The brokerage mentioned that the key to long-term growth lies in scaling up Marico’s adjacency portfolio.
Jefferies has maintained a 'Buy' rating on Marico and raised its price target to ₹800 from ₹780 per share.
The foreign brokerage said that India volume growth of 7% is impressive, and international constant currency (CC) growth also remains strong.
However, margins are under pressure due to gross margin compression and higher advertising and promotion (A&P) expenses.
Jefferies added that the outlook remains reasonably positive for both the core and growth portfolios.
Meanwhile, Emkay Global has upgraded Marico to 'Buy' from its earlier 'Add' rating, and raised price target by 16% to ₹810 from ₹700 earlier, given FY25 management aspirations have been already realised and execution is continually improving.
For its India business, Emkay sees double-digit sales growth momentum sustaining ahead, with the organic business maintaining high single-digit growth (gradual shift from price to volume-driven growth), while new initiatives remain accretive.
With expectation of better management of deflation in coconut oil and edible oil prices, the brokerage also sees margins improving for the core portfolio from H2FY26E. Concurrently, dilution from new initiatives would gradually subside.
Given better topline and control on margins, Emkay has lifted earnings by 5-9% over FY26-27E.
Nuvama Institutional Equities also has a 'Buy' rating on the stock, with a price target raised to ₹815 from ₹785 earlier. Motilal Oswal has reiterated its 'Buy' rating, maintaining a price target of ₹800.
Among the 42 analysts that have coverage on Marico, 31 of them have a 'Buy' rating on the stock, eight say 'Hold', while three others have a 'Sell' rating.
Shares of Marico Ltd. are currently trading 4.06% higher on Monday at ₹725.80. The stock is up 13% so far this year.
