Sharekhan is bullish on Marico has recommended buy rating on the stock with a target price of Rs 425 in its research report dated November 29, 2018.
Sharekhan's research report on Marico
Stock price run-up by 14% in one month; Margins to enhance in the coming quarters on account of receding copra prices: The stock price of Marico has moved up by ~14% in the past one month due to positive commentary by management on demand environment and margin improvement due to declining copra prices. Despite the recent run-up, the stock is trading at decent valuations of ~35x its FY2021E earnings, which is at a discount to some of the large FMCG stocks. The correction in copra prices gives us visibility of strong earnings growth in H2 and provides scope for Marico to enhance focus on improving sales volume in the coming quarters. Thus, we maintain Marico as one of our top picks in the FMCG space because of double-digit earnings growth visibility.
Marico’s bottom line is likely to register an 18% CAGR over FY2018-FY2021; maintain Buy with a revised PT of Rs. 425.
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