Buy Marico; target of Rs 775: Motilal Oswal

Buy

Motilal Oswal's research report on Marico

We met with the management of Marico (MRCO) to discuss industry trends, the company’s growth across verticals, and its long-term strategies. MRCO is focused on achieving steady double-digit growth, driven by the gradually improving trajectory in its core categories, rapid scaling of new-age businesses, and stable growth in international markets. The company is shifting its focus towards value-added products, particularly in foods and premium personal care, with a target of 20-25% CAGR in these segments. Parachute and Saffola demand remain steady despite sharp price hikes (15-20%) implemented to mitigate input cost pressure. Within the Saffola franchise, Foods is expected to contribute more than half of the revenues (currently at ~30%) over the next 4-5 years. Marico’s Digital business is growing rapidly, with Plix and Beardo showing strong progress. The company is expanding its direct reach in General Trade (GT) through Project SETU and is benefiting from the growth of Quick Commerce (QC), which now accounts for ~3% of India sales. Despite challenges in urban demand, the company’s diversified portfolio and investment in digital channels are positions it for sustained healthy growth.

Outlook

The company expects double-digit revenue growth (missing for most peers) in FY26, driven by healthy volume growth, pricing, and continued momentum in the Foods and Premium Personal Care portfolios. While elevated input costs may weigh on margins in the near term, the long-term outlook remains positive, supported by a favorable product mix and premiumization. We reiterate our BUY rating on the stock with a TP of INR775 (based on 50x Mar’27E EPS).

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Marico - 26032025 - moti