ICICI Direct recommended Hold rating on Marico with a target price of Rs 410 in its research report dated October 29, 2019.
ICICI Direct's research report on Marico
Marico posted muted Q2FY20 results with 1% YoY volume growth owing to subpar performance from its core segments. Parachute rigid packs volume declined 1% while value added hair oil (VAHO) portfolio volume growth was flat during the quarter. Saffola volume growth was muted at 1%. With 564 bps gross margin expansion, the company leveraged additional cash flows towards higher promotional spend. Despite 12% increase in A&P spend, operating margins expanded 270 bps to 19.3%. Net profit grew 17% YoY to Rs 253 crore. The company declared interim dividend of Rs 2.75 per share.
However, due to weakness in VAHO & Saffola categories and tepid domestic volume growth on the back of sluggish rural demand, we believe near term upside will remain capped. Hence, we downgrade our rating to HOLD with a revised target price of Rs 410/share.
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.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.