Marico jumps 9% as steady Q2 results sparks optimism, brokerages see up to 27% upside potential

Nomura shared a 'buy' call for the FMCG player and put out target price at Rs 760 apiece

Shares of Marico jumped over 9 percent to Rs 687 per share as brokerages were impressed with its July-September quarter (Q2FY25) performance, which came in-line  with its pre-quarterly update. Analysts maintained their 'buy' calls on the counter, predicting over 27 percent upside from current levels.

Nomura shared a 'buy' call for the FMCG player and put out target price at Rs 760 apiece, seeing no impact from urban category as it primarily caters to premium and mass-market segments. Moreover, the company's price hike strategy also helped improve growth outlook.

Around 10 percent price hike was undertaken for Parachute from the second half, which reflected mid-single digit volume growth and market share gain, highlighted Nomura. Similarly, 15 percent price hike was taken for Saffola Oils in H2, which resulted in minimal volume backlash. Besides that, foods, premium personal care, and digital brands - all of them showed healthy growth trajectory.

ALSO READ: Marico Q2 results: FMCG firm's net profit rises 20% to Rs 433 crore

Joining the bullish chorus, Jefferies also shared a 'buy' rating and assigned Rs 800 apiece as target price. Jefferies said that the Q2 was in-line with India volume growth at 5 percent, supported by rural markets. Going forward, the management indicated positive quarters coming ahead as well as in the medium-term. However, if inflation returns back, Marico could face some margin pressures, the brokerage firm added.

Marico's second-quarter profit rose by 20 percent year-on-year (YoY) to Rs 433 crore, while revenue from operations rose by 7.4 percent YoY to Rs 2,664 crore. At the operational level, Marico's EBITDA showed a modest increase of 5 percent YoY in Q2FY25.

Marico’s quarterly business update highlighted stable sector demand, with rural markets outpacing urban areas for a third consecutive quarter. The company reported mid-single-digit volume growth in its domestic segment, showing sequential improvement. The international business also delivered solid low-teen growth in constant currency, with each market contributing positively.

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