Sharekhan has given Buy recommendation for Marico with a target price of Rs. 562 in its research report issued on Jun 07, 2021
Sharekhan’s research report on Marico
Management has maintained its medium term target of achieving 8-10% volume growth in the domestic business. This will be driven by deepening penetration in rural market, market share gains in core categories and new product launches. Copra prices have corrected by 15% from their recent peak and are expected to remain flat along with softness in other edible oils in FY2022. Consolidated OPM would stay at 19-20%. Stock saw a healthy run-up of ~19% post Q4 results and positive management commentary. It is currently trading at 40x its FY2023E earnings.
Outlook
We maintain a Buy on Marico with revised PT of Rs. 562. Recent correction in copra prices, steady growth in core categories and a scale up in foods business improves earning visibility.