Marico share price rises nearly 2% on robust volumes in Q1 FY22; brokerages maintain 'buy'

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26 Aug, 2025 12:21

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Marico share price rose nearly 2 percent in early trade on July 5 after the company reported its operating performance for the first quarter of FY22.

The India business delivered 30% plus revenue growth, backed by robust double-digit volume growth, the company said in its release.

A marginal correction of the historical revenue skew from Q1 towards the previous quarter (Q4 FY21) is imputed into this quarter’s performance. Parachute Coconut Oil delivered ahead of medium-term expectations, it added.

The gross margins will remain under pressure in this quarter due to consumption of higher-cost inventory and will improve from Q2 onwards.

However, the operating margin in the quarter will drop sharply on a year-on-year basis, given the exceptionally high base of 24.3% (due to rationalization of A&P spends and other overheads in the base quarter) and the arithmetic (high denominator) effect of significant pricing-led growth. Owing to the above, the company expects muted bottom-line growth in the quarter.

The company's board meeting is scheduled on July 30, 2021, through audio-visual means, to consider and approve the un-audited consolidated and standalone financial results of the company for the quarter ended June 30, 2021.

The Q1 input cost inflation offset revenue growth. The company expects to deliver muted bottom-line growth in the quarter.

There was a healthy revenue momentum. The EBITDA margin will be up QoQ, helped by revenue leverage.

For Q1, our revenue/EBITDA/profit forecasts stand at 30%/3%/6%. On the new food forays, the company noted good progress. JPMorgan raised FY23 EPS by 3% led by higher revenue forecasts.

There are no material surprises from the Q1 trading update. The revenue growth will be healthy & the margin will contract on last year’s high base. 8% 2-year CAGR should be one of the highest in staples coverage.

Gaining market share in core domestic portfolio through new launches, scaling up food business, and improving growth prospects in countries such as Bangladesh and Vietnam are some of the key growth levers for Marico in the near to medium term.

Inflationary trends are receding and OPM is expected to see improvement from H2FY2022. The company is focusing on becoming strong play in the foods spaces and targets revenues of Rs 800-1000 crore by FY2025.

Marico's resilient product portfolio has delivered an impressive performance across categories, with the domestic business registering strong double-digit volume growth, even as most of 1QFY22 was disrupted by COVID-led lockdowns.

Growth in Parachute is highly encouraging. The continued rebound in VAHO is a positive, and further commentary needs to be watched out for. Outlook on its international business is getting better. Material costs are beginning to stabilize post the sharp inflation seen at the beginning of 1QFY22. This will help bolster gross margin.

At 09:19 hrs, Marico was quoting at Rs 520.10, up Rs 0.60, or 0.12 percent on the BSE.

The share touched a 52-week high of Rs 543.55 and a 52-week low of Rs 333.30 on 30 June, 2021 and 24 September, 2020, respectively.

Currently, it is trading 4.31 percent below its 52-week high and 56.05 percent above its 52-week low.

Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.