Accumulate Marico; target of Rs 320: Dolat Capital

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26 Aug, 2025 12:21

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Dolat Capital's research report on Marico

Marico’s Q4FY20 revenue and EBITDA came below our estimate but APAT was in line. India business reported 3% volume de-growth while overall volume de-growth was 4%. Volume growth would have been mid-single digit excluding lock down impact. Parachute and value added hair oils (VAHO) reported volume and value decline due to significant drop in sales in second half of March. Saffola continues to outperform with 25% value/volume growth. Domestic gross margin improved +50bps YoY, primarily due to a decline in copra prices. Going ahead, we expect mild inflation in copra prices in the ensuing quarters. We also believe that Parachute volumes would recover fast, as the secondary sales continues to remain positive.

Outlook

We lower our FY21E and FY22E EPS estimates at ` 8.5 and ` 9.1 respectively. Valuing the stock at 35x FY22E EPS to arrive at a TP of `320. Maintain Accumulate.

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