Sharekhan's research report on Marico
Marico registered another soft quarter in Q3FY2024 hit by sluggish rural demand, stock correction and price deflation, resulting in low single-digit revenue decline with domestic volume growing by 2%. Volume offtake is expected to gradually improve in the quarters ahead. Volume growth of 5-7%, a better mix and some pricing inflation will help low-double digit revenue growth in FY2025. Consolidated OPM to improve by 250 bps in FY2024 with strong expansion in gross margins. Premiumisation and scale-up in the food business are expected to drive consistent improvement in the medium term.
Outlook
Stock has underperformed its close peers and trades at 39x/35x its FY2025E/FY2026E earnings. We retain a Buy with a revised price target of Rs. 605.
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