Sharekhan has given Buy recommendation for Marico with a target price of Rs. 645 in its research report issued on May 05, 2022
Sharekhan’s research report on Marico
Marico’s Q4FY2022 performance largely met expectations with revenues growing by 7.4% (flat sales volume y-o-y; two-year volume CAGR of 12%) to Rs. 2,161 crore; OPM stood flat at 16%; PAT grew by 6.6% to Rs. 257 crore. FY22 volumes grew by 7%. The company has maintained its medium term outlook of 5-7% volume growth for Parachute rigid pack, double digit volume growth for Value-added hair oil and double digit growth for Saffola franchise. Copra prices (50% of raw material cost) have corrected from its high and are expected to remain benign in FY2023. Vegetable oil and other crude link input prices likely to correct in H2FY2023. OPM is expected to remain high in FY2023.
Relative better earnings visibility compared to peers and attractive valuations at 42.6x/36.2x its FY2023E/24E earnings makes it the best pick in the consumption space. We retain Buy on the stock with an unchanged price target of Rs. 645.