Sharekhan has given Buy recommendation for Marico with a target price of Rs. 645 in its research report issued on Mar 03, 2022
Sharekhan’s research report on Marico
Copra prices are down by ~7% m-o-m in February 2022 (down by 36% y-o-y) and Kardi oil down by ~8% on y-o-y basis. The company has undertaken price-off of 5-11% in Parachute brand and 4-5% in Saffola edible oil in key markets to improve its sales volume. Consistent fall in copra prices will help the company post higher margins in FY2023 as compared to other FMCG companies and will also help regain volume growth through prudent pricing actions. The company is focusing on de-risking its business model by scaling up high margin businesses such as foods business (will contribute Rs. 800-1,000 crore in FY2024) and digital brands (Rs. 450-500 crore by FY2024).
We maintain our Buy recommendation on Marico with unchanged price target of Rs. 645. Better margin visibility, strong medium term growth prospects and decent valuations at 36x its FY2024E earnings makes it a good pick in the FMCG space.
At 12:30 hrs Marico was quoting at Rs 501.05, down Rs 10.05, or 1.97 percent.
It has touched an intraday high of Rs 509.65 and an intraday low of Rs 498.95.
It was trading with volumes of 31,956 shares, compared to its thirty day average of 81,835 shares, a decrease of -60.95 percent.
In the previous trading session, the share closed down 0.23 percent or Rs 1.20 at Rs 511.10.
The share touched its 52-week high Rs 606.00 and 52-week low Rs 379.05 on 18 October, 2021 and 19 March, 2021, respectively.
Currently, it is trading 17.32 percent below its 52-week high and 32.19 percent above its 52-week low.
Market capitalisation stands at Rs 64,767.34 crore.