Buy Marico target of Rs 325: Sharekhan

Sharekhan's research report on Marico

Marico's consolidated revenue declined by ~7% due to an 8% decline (volume decline was 3%) in India business and 5% decline in domestic business. Gross margin improved by 23 bps, while lower advertisement spends and other expenses led to 126 bps improvement in OPM to 18.9%. The company is Focusing on delivering healthy growth in the medium term through revamp strategies of providing value preposition in core categories, launching new products in the health and hygiene space, stringent cost-saving initiatives, and expanding the direct distribution reach.

Outlook

The stock is currently trading at discounted valuation of 30x its FY2022E EPS. In view of long-term growth prospects and discounted valuation, we maintain Buy with a revised PT of Rs. 325.