Shares of Marico gains over 6% to intra-day high of Rs 687 on NSE following the company’s Q2FY25 earnings report released on Tuesday after market hours. The homegrown FMCG major reported a 20% increase in consolidated net profit, reaching Rs 433 crore for the September quarter, up from Rs 360 crore in the same period last year.
Revenue and Expenses Overview
Marico’s consolidated revenue from operations rose by 7.6%, totaling Rs 2,664 crore during the quarter under review, compared to Rs 2,476 crore a year ago.
However, total expenses for the company, which owns popular brands such as Saffola, Parachute, and Livon, increased by 7.65% to Rs 2,194 crore in the September quarter.
Total Income and Domestic Performance
The company’s total income, which includes other sources of revenue, was up by 9.22% to Rs 2,746 crore. Domestic revenue saw an 8.02% increase, amounting to Rs 1,979 crore, up from Rs 1,832 crore in the same quarter last year.
International Revenue Growth
Marico’s revenue from the international market also showed positive growth, rising 6.36% to Rs 685 crore, compared to Rs 644 crore in Q2FY24.
The company highlighted a “sequential uptick in growth in the domestic business,” while noting that the “international business continues to show robust performance,” as stated in its earnings presentation.
Brokerages on Marico
Jefferies on Marico
Jefferies has maintained a “Buy” rating on Marico and raised the target price to Rs 800 per share. The report indicates that the company’s Q2 performance was in line with expectations, featuring India volume growth of 5%, primarily driven by rural demand.
Jefferies anticipates that, with inflation returning, Marico is likely to experience accelerated revenue growth in the upcoming quarters. However, the firm also notes that inflation may exert some pressure on the company’s margins.
Nomura on Marico
Nomura has issued a “Buy” rating on Marico with a target price of Rs 760 per share. The report confirms that the company’s Q2 results were in line with its pre-quarterly update, indicating an improvement in demand.
Nomura highlights that Marico has not been adversely affected by weakness in urban markets, as it caters to both premium and mass segments. The firm notes that sharp price hikes have positively impacted the growth outlook for the company.
Specifically, Parachute is expected to see a 10% price increase starting in H2, along with mid-single digit volume growth and market share gains. Similarly, Saffola Oils will implement a 15% price hike from H2 with minimal backlash on volume.
The report also points out that the Foods, Premium Personal Care, and Digital Brands segments are demonstrating a healthy growth trajectory. However, the Value-Added Hair Oils (VAHO) segment experienced another weak quarter but is believed to have bottomed out.
Stock Performance in Last One Year
The shares of Marico have demonstrated mixed returns across various time intervals. In the last month, the stock delivered a negative return of 4.75%. Over the past six months, it exhibited strong momentum with returns of 27.88%, indicating a robust performance.
Year-to-date figures further emphasized the stock’s bullish trend, recording an impressive growth of 20.77%. Looking at the broader horizon, the shares have shown consistent strength, given returns of over 24.46% in the last year.
(Disclaimer: Views, recommendations, and opinions expressed are personal and do not reflect the official position or policy of Financial Express.com. Readers are advised to consult qualified financial advisors before making any investment decisions. Reproducing this content without permission is prohibited.)