Buy Marico; target of Rs 800: Motilal Oswal

Motilal Oswal's research report on Marico

Marico (MRCO) reported consol. revenue growth of 20% YoY (in line) in 4QFY25. Domestic revenue growth was 23% YoY, while volume growth was 7%. International growth was 11% YoY (16% CC growth). Domestic revenue growth was driven by strong core category growth and sustained success for its new growth drivers. Parachute coconut oil (PCNO) posted 22% YoY value growth with a 1% volume decline, driven primarily by price hikes. With copra inflation persisting, an additional 8-10% price increase was implemented in Apr’25, bringing the total YoY hike to ~30%. Value-added Hair Oils’ (VAHO) revenue was up only 1% YoY, affected by persistent weakness in the mass segment. Saffola oil clocked a marginal decline in volume growth, with revenue growing 26% YoY, led by pricing. Foods maintained a strong growth momentum of 44% YoY. Premium Personal Care sustained its healthy growth trajectory.

Outlook

The stock was the top performer among peers in FY25 (>35% return). With the growth trajectory continuing, we expect the rich valuation to sustain. We reiterate our BUY rating on the stock with a TP of INR800 (based on 50x Mar’27E EPS).

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