Brokerages predict 18% upside in Marico, despite sequential drop in earnings

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26 Aug, 2025 12:21

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The Marico stock attracted investor attention a day after the company declared its September quarter earnings.

The FMCG major on October 28 reported a 22 percent year-on-year growth in its consolidated revenue at Rs 2,419 crore from Rs 1,989 crore reported last year.

On a sequential basis, its revenue declined 4 percent from Rs 2,525 crore in the previous quarter.

The company also witnessed a growth of 8 percent in profit after tax (PAT) at Rs 309 crore during the period against Rs 285 crore (excluding extraordinary items) logged in the year-ago quarter.

Its India, the business witnessed a volume growth of 8 percent from last year, while the YoY growth in international markets on a constant currency basis came in at 13 percent.

The stock was trading at Rs 564.90, up Rs 0.95, or 0.17 percent, at 10:07am. It has touched an intraday high of Rs 566.80 and an intraday low of Rs 552.65.

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Global research firm CLSA has maintained ‘underperform’ call on the stock and raised the target. It is of the view that the Q2 earnings were in line but valuation capped the upside. The brokerage feels that improving mobility helps but margin stress to remain in the near term.

In the near-term, the firm expects sequential expansion in its gross margin while EBITDA expansion is likely to start in Q4, it said. The research firm has cut its EPS estimate by 6 percent for FY22.

Credit Suisse, on the other hand, has an ‘outperform’ call on the stock with a target at Rs 630 per share, an upside of 11 percent from the current level. According to the research firm, Q2 growth was ahead of its peers. Marico’s gross margin improved 150 bps over the last year and is likely to continue improving. However, it feels that the margin will start widening only by Q4. It has increased its FY22 earnings by 3 percent.

Morgan Stanley has an ‘overweight’ call on the Marico stock with a target at Rs 670 per share, an upside of 18 percent from the current market price. The research firm is of the view that the Q2 earnings was marginally lower than estimates, but was ahead of consensus. The strategy of strengthening core business while building non-core business is on track, it said.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.