Brokerages post mixed sentiment on THIS FMCG stock as company releases quarterly update — check price target here

On the back of its quarterly update, the brokerages posted a mixed stance for the Marico, as Goldman Sachs maintained a Neutral call while Citi has suggested to Buy the FMCG stock.

Marico on Friday has said its domestic business has grown over 30 per cent in the first quarter of the financial year 2021-2022 aided by double-digit volume growth.

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In its quarterly update, the company also said it is seeing 'improving demand trends', as the second wave appears to be receding and the vaccination drive is progressing steadily.

Goldman Sachs downgrading the target to Rs 475 per share from the current market price of Rs 523 apiece, Friday's close, it said input cost inflation offsetting revenue growth.

The brokerage further said that the company expects to deliver muted bottom-line growth in the first quarter of FY22.

On the other hand, Citi says no material surprise from the Q1 update by Marico. It expects, the revenue of the company will be healthy and margin will contract on last year's high base.

While setting a target of Rs 595 per share for the FMCG stock, Citi adds, eight per cent 2-year CAGR (compound annual growth revenue) should be one of the highest in staples coverage.

Marico in its Q1 update also said that the gross margins will remain under pressure in this quarter due to consumption of higher-cost inventory and will improve from Q2 onwards.

Adding further that the company is “adequately prepared to tackle” any disruptions in the business environment resulting from the third wave of Covid-19.