Buy Marico; target of Rs 645: Sharekhan

Sharekhan's research report on Marico

Marico’s Q3FY2023 performance was in line with expectations, with revenues growing by 2.6% y-o-y to Rs. 2,470 crore, OPM marginally grew by 56 bps y-o-y to 18.5% while PAT grew by 5%. Domestic business volume growth improved to 4% (6% on 3-year CAGR basis). With price stability in key categories, sales volume would sequentially improve. The management has maintained its guidance of 8-10% domestic volume growth in the next 2-3 years. As input prices stabilise, OPM is expected at 18-19% in FY2023 and would consistently improve over the next 2-3 years driven by improvement in India business mix, economies of scale and improvement in international business.

Outlook

Stock trades at attractive valuations of 38.1x/33.5x its FY2024E/FY2025E earnings. We retain Buy on the stock with an unchanged PT of Rs. 645.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies 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.

Marico - 06 -02 - 2023 - khan