Sharekhan is bullish on Marico has recommended buy rating on the stock with a target price of Rs 420 in its research report dated September 14, 2020.
Sharekhan's research repor on Marico
Revenue is expected to recover to mid-to-high single digits in Q2FY2021 from 3% in May-June (and an 11% decline in Q1FY2021). Core brands Parachute coconut oil have recovered and registered sales that is better than pre-COVID levels (in July-August); Saffola edible oil continues to get good demand and is expected to register an 8-12% volume growth. Conservative ad-spends and stringent cost-saving measures would help company save Rs. 150 crore in FY2021; consolidated OPM to remain at over 20%. Stock is trading at 36x its FY2022E earnings, which is at discount to large-cap stocks.
We maintain our Buy recommendation on the stock with unchanged PT of Rs. 420.
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