Marico shares slip over 4% after Q1 results; should you buy, sell or hold?

Shares of Marico declined over 4 per cent on Tuesday (August 6) a day after the homegrown FMCG major reported its Q1FY25 numbers. 

At around 9:23 a.m., shares of Marico were down 2.87 per cent at Rs 19.3 at Rs 653.1 on BSE. The market capitalisation of the company at around the same time stood at Rs 84,552.59 crore. 

On Monday, during market hours, Marico— the owner of popular brands like Saffola, Parachute, and Livon— reported an 8.71 per cent rise in consolidated net profit to Rs 474 crore for the first quarter that ended June 30, helped by volume gains and gross margin expansion.

It had posted a net profit of Rs 436 crore a year ago. The company's consolidated revenue from operations rose 6.7 per cent to Rs 2,643 crore during the quarter under review. It was Rs 2,477 crore in the year-ago period.

It has an "underlying volume growth of four per cent in the domestic business and constant currency growth of 10 per cent in the international business", according to an earning statement from Marico.

Marico's gross margin expanded by 230 bps year-on-year, and its advertising and promotion spending increased 13 per cent year-on-year in the June quarter.

On the FMCG industry, Marico said in the June quarter, overall volume trends in India continued to exhibit gradual improvement on a two-year CAGR basis, with the trajectory in rural markets bearing more promise, while urban was stable.

Management commentary

Saugata Gupta, MD & CEO, Marico said the new fiscal has started on a promising note for domestic and international businesses, with revenue growth visibly turning a corner.

"We expect to sustain the improving trajectory in the core domestic business on the back of consistent market share and penetration gains coupled with the ongoing initiatives to revive growth in traditional trade and expand direct reach under Project SETU," he said.

Besides, Marico will also maintain a steadfast focus on the profitable scale-up of the Foods and Digital-first brands, Gupta added.

Should you buy, sell or hold? 

Jefferies has maintained a 'buy' and raised the target to Rs 780 from Rs 650. Similarly, Goldman Sachs continued with a 'buy' call and raised the target to Rs 715 from Rs 660. 

Likewise, JP Morgan maintained an overweight rating and raised its target to Rs 715 from Rs 660.  Additionally, Morgan Stanley maintained an 'equalweight' rating and raised the target to Rs 596 from Rs 566. 

Meanwhile, Citi maintained a 'buy' and raised its target to Rs 765 from Rs 700. Lastly, Macquarie iterated an 'outperform' rating and gave a target of Rs 730. 

Marico share price: Past performance

Shares of Marico gained over 16 per cent in a year against Nifty50's rise of 22 per cent. 

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