Marico gains as rural demand turns a corner, food business drives Q3 growth

Marico: Marico Q3 earnings meet estimates, profit grows 5% to Rs 333 crore with operating margin rising 56 bps. The FMCG company has registered a 5.04% year-on-year growth in consolidated profit at Rs 333 crore for October-December period of FY23 led by higher operating margin performance and other income. Revenue for the quarter at Rs 2,470 crore grew by 2.6 percent compared to year-ago period with India business rising 1.9% YoY to Rs 1,851 crore and international segment growing 5% to Rs 619 crore. At the operating level, EBITDA increased by 5.8% YoY to Rs 456 crore and margin expanded by 56 bps YoY to 18.46% on lower input cost.

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26 Aug, 2025 12:21

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Share price of Marico gained over 2 percent on February 6, as the FMCG company's consolidated net profit grew 5.04 percent to Rs 333 crore in the October-December 2022 quarter, largely meeting Street expectations.

Its revenue from operations was at Rs 2,470 crore, up 2.61 percent during the quarter under review, as against Rs 2,407 crore a year ago.

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The stock closed at Rs 505.80 apiece on the NSE, higher by 2.41 percent. Trading volumes at 2.36 million shares were almost double the 20-day average volume of 1.25 million shares.

Rural market had declined for six consecutive quarters, which has now been arrested, highlighted the management in its concall. "There is indication of a gradual improvement in consumption trends. Rural continued to be a drag but started improving in December 2022," the company said.

Domestic volume growth at 4 percent YoY in the quarter, came on the back of strong performance by Saffola franchise. The foods business is on track to achieve targeted sales of Rs 650 crore in FY23 and is expected to reach Rs 850 crore - Rs 1,000 crore in FY24.

Meanwhile, Value Added Hair Oils (VAHO) was a drag for the company. Sales declined 3 percent, with mass segment taking a hit while mid and premium segments fared better.

Parachute revenue declined 6 percent due to price-cuts on rangebound copra prices. However, the brand managed to gain 30 basis points market share, largely from the unorganised market.

Domestic brokerage Prabhudas Lilladher has a Hold rating on the stock with a target price of Rs 532 apiece. "We believe Marico is well placed to accelerate growth due to launch of new products in mid-sized but high growth categories of peanut butter and mayo, improved price value equation of marico

Saffola in edible oils and increased focus on digital brands," it noted.

ICICI Direct also has a Hold rating on the stock with a target price of Rs 555. Meanwhile, JM Financial and Motilal Oswal Financial Services have Buy ratings on the stock with a target price of Rs 575 and Rs 580, respectively.

"The company’s earnings growth prospects are healthy with expectations of a ~14-15 percent compounded annual growth rate over FY22-24E and return on equity (RoE) of over 40 percent," said MOFS.