Buy Marico; target of Rs 645: Sharekhan

Buy

Sharekhan's research report on Marico

Marico’s Q4FY2023 numbers met our expectations with volume-led y-o-y revenue growth of 3% to Rs. 2,240 crore, OPM expanding by 153 bps y-o-y to 17.5%, while adjusted PAT growth at 10% y-o-y to Rs. 283 crore. Domestic volume growth would be at 7-8% in FY2024 as compared to 3-5% volume growth achieved in past three quarters. International business will continue to growth in double digits. Gross margins are expected to expand by 200-250 bps, while OPM would expand by 100 bps in FY2024 (to be around 18.5%). Marico aims to maintain OPM at 19% in the medium term.

Outlook

Stock trades at attractive valuations of 39x/34x its FY2024E/FY2025E earnings. We retain a Buy on the stock with an unchanged PT of Rs. 645.

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Marico - 08 -05 - 2023 - khan