Marico Ltd. share price target

Q3FY22 revenue registered a healthy growth of 13.4% YoY (-0.5% QoQ) on strong volume and demand growth in both domestic and international markets on YoY basis, whereas QoQ was impacted due to...

IBD posted 18% growth across geographies & likely to continue in near term. We are upgrading MRCO to Accumulate (Hold earlier) as the stock offers value at 34.2xFY24 EPS with ROE/ROCE of 44.8%/55% and ~80% dividend payout post ~19% correction from peak. 3Q volumes disappointed a bit on...

Input cost pressure impacts operating profit margins Gross margin contracted 556bp YoY (for 5rth consecutive quarter) to 42% due to input cost pressure. However, tight cost control reduced the impact on EBITDA margin contraction to 207bp YoY to 18%. EBITDA and APAT grew 9%YoY and 3%YoY...

MRCO maintained its positive trajectory in the Foods business. The management reiterated its sales target at INR5b by the end of FY22. Honey, Oodles, and Soya Chunks continue to do well, with strong market share and leadership position within their categories. With a sales target of INR4.5-5b by FY24 from digital first brands, there is a much required diversification in the portfolio, boosting its medium-to-longterm topline growth prospects. With sustained healthy topline momentum in its core brands now allied with newer revenue streams, higher P/E multiples compared to the past are...

Copra prices down 11% sequentially and 5% YoY. Expect GRM's to improve in Q3 and Q4, EBIDTA margin recovery by 4Q only due to inflation. We are cutting FY22EPS by 4.1% on input cost pressures and higher ad spends post 2Q22 while FY23/24 EPS is expected to increase by 0.1%/1.9% as margins normalize to ~19% range. We expect volume growth in both Saffola and Parachute to moderate to long term trajectory. Medium term outlook remains positive given that 1) Softening of Copra prices will aid...

Displaying resilience, Marico reported strong all-round performance in the midst of a quarter impacted by a lockdown-induced slowdown. Company witnessed ample recovery in margins and we expect further improvements from current levels in the coming quarters. Maintaining a positive outlook, we upgrade our rating on the stock to BUY with a revised target price of Rs. 590 based on 50x FY23E adj. EPS. Volumes and demand growth aids topline During Q1FY22, Marico reported a broad-based recovery on the back of revival in...

EBITDA was at | 481 crore, up 3.1% YoY, with margins at 19% Consequent PAT was at | 365 crore (down 5.3% YoY) What should investors do? Marico's share price has given 84% return in the last...

MRCO's 1QFY22 result was in line with our expectations. Sales momentum continues to remain healthy. With Copra prices sharply declining from their peak in recent months, coupled with price increases taken, the...

We are increasing FY22/23 EPS by 7.2%/3.8% on the back of high sequential growth in margins as input cost inflation has peaked out. We believe outlook remains positive going forward given 1) strategy to push volumes working in high inflationary environment in Parachute and VAHO 2) Improved competitive positioning of Saffola 3) Foods on track to achieve Rs5bn revenue in FY22 and Rs8.5bn by FY23 4) Got-to-markets expansion through chemist channel in Urban and direct reach in rural by 25% increase in stockists in next 2 years and 5) Focus on digital brands to provide Rs4.5-5bn...