Marico share price surges, hits new high as brokerage revises target price of stock

As a brokerage revises its target for this FMCG (Fast Moving Consumer Goods) stock, the shares of Marico soared almost five per cent to touch a new life high of Rs 533.1 per share on the BSE intraday trade today. The stock surpassed its previous life high of Rs 527.4 apiece, hit on June 21, 2021.   

Ahead of today’s session, Credit Suisse termed Marico to be a showstopper amongst the peers with a growth opportunity on the back of good revenue numbers. The brokerage had given a Buy call for the stock by revising the price target to Rs 600 apiece from Rs 490 per share. 

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At around 12:30 pm, the stock is trading over four and a half per cent higher to Rs 531.9 per share on the BSE, as compared to 0.28 per cent decline in the S&P BSE Sensex today. 

The brokerage is of an opinion that the company would be amongst most successful TAM (Total Addressable Market) expansion in FMCG space in this decade if it achieves revenue target for Saffola Foods in fiscal 2024.  

One of the prominent stocks in the FMCG space, Marico has a market capitalisation of Rs 65, 673.47 crores, as per BSE data, and has products under the brand name Parachute and Saffola primarily.  

Credit Suisse believes, Saffola Foods expansion can drive a re-rating in the company, and it expects reaching Rs 740 crore of revenue in the financial year 2020-2021, moreover, Rs 850 crore target in foods will be achieved through 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.  

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 35 per cent rise in the revenues at Rs 1604 crore versus Rs 1188 crore year-on-year.