Credit Suisse bullish on THIS mid-cap FMCG stock – check revised price target here

Being bullish on this FMCG stock, brokerage firm Credit Suisse expects Marico to be showstopper amongst the peers with an opportunity of growth amid rising revenues. The brokerage gave a buy call for the stock by revising the price target to Rs 600 apiece from Rs 490 per share earlier.

Credit Suisse is of an opinion that the company would be amongst most successful TAM (Total Addressable Market) expansion in FMCG (Fast Moving Consumer Goods) space in this decade if Marico achieves revenue target for Saffola Foods in fiscal 2024.

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It believes Saffola Foods' expansion can drive a re-rating in the company and expects it to reach Rs 740 crore of revenue in FY24. It further added Rs 850 crore target in foods will be achieved via one more category entry.

The brokerage firm lowers its FY22 EPS estimate by two per cent due to near-term margin pressures and mentions need faster ramp-up in Honey and Soya chunks to achieve the revenue target.

One of the prominent stocks in the FMCG space, Marico has a market capitalisation of Rs 65673.47 crore, as per BSE data, and has products under the brand name Parachute and Saffola primarily.

The stock on Monday traded weak ending half a percent lower to Rs 508.55 per share on the BSE. It recently had touched its new life high of Rs 527.4 apiece on June 21, 2021. 

In the last five sessions, the stock has been on the decline, trading between Rs 510-520 levels, while it has surged around 10 per cent in the last month.

Amid lockdown worries, the company reported a marginal jump of seven and a half per cent to Rs 244 crore in March-ended quarter of FY21 as compared to Rs 227 crores in the same period year ago, while it posted a 35 per cent rise in the revenues at Rs 1604 crore versus Rs 1188 crore year-on-year.