Marico Ltd. share price target

We re-iterate a Buy on Marico with a revised PT of Rs. 821. Stock trades at 52x, 45x and 39x its FY25E, FY26E and FY27E earnings, respectively with near to medium-term growth prospects intact.

Similar to Marico, Indian power companies along with global MNCs are facing increased challenges in cash transfers from Bangladesh

Compared to consensus, sales were in line and EBITDA 1% higher. Volumes were +4%, an acceleration vs +2% in the Mar'24 quarter

Marico Bangladesh (MB), operating in Household and Personal Care, accounts for 11% of MRCO's consolidated sales

Marico continues to be on track to execute its stated objectives of increasing direct distribution by 50% by FY27 (Phase 1 initiated in 6 states) and accelerate growth in diversified portfolio.

We note that Marico’s thrust on enhancing its fundamentals is well captured by
the market. Renewed focus on distribution expansion, portfolio enrichment, and
enhancing margin is encouraging. However, valuations at FY26E P/E of 43x
capture the positives.

Stable performance in domestic markets with consistent improvement in gross margins

Marico’s soft performance in Q4FY2024 was largely in line with expectation with revenues growing by 2% (volume growth of 3%) while EBIDTA margins improved by 186 bps y-o-y to 19.4% resulting in 13% y-o-y growth in PAT.

NAM: Strong growth but upside capped cut to HOLD. APOLP: Disappointing result on all fronts. ITC: Cigarette and paperboard businesses disappoint. LT: Order inflow guidance raised; maintain BUY. NTPC: Normal quarter, aggressive expansion; maintain BUY. MRCO: Domestic business still lacklustre. UTIAM: Core earnings miss estimates. ASTRA: Mixed quarter, guidance broadly intact