Marico Share Price Surges As Q2 Profit Beats Forecasts

Marico Ltd.'s share price surged up to 9.19% in early trading on Wednesday after the FMCG company reported a 20% year-on-year rise in consolidated net profit for the second quarter, surpassing analysts’ expectations.

The company posted a profit of Rs 433 crore for the September quarter, compared to Rs 360 crore in the same period last year, as per an exchange filing on Tuesday. Bloomberg analysts had projected a consensus estimate of Rs 389 crore.

The FMCG company noted that positive demand trends in the first half signal an improving outlook for the second half. The company expects support from factors such as above-normal monsoon, government spending on the rural economy, and the festive season. But elevated food and retail inflation could be key near-term risks, it said.

Revenue increased by 8% to Rs 2,664 crore during the July–September period, up from Rs 2,476 crore a year earlier, though slightly below Bloomberg's consensus estimate of Rs 2,684 crore.

Earnings before interest, taxes, depreciation, and amortisation rose 5% to Rs 522 crore, while the Ebitda margin narrowed by 50 basis points to 19.6% from 20.1% a year ago.

Marico's stock rose as much as 9.19% before paring gains to trade 7.02% higher at Rs 673.30 apiece, compared to a 0.36% decline in the benchmark Nifty 50 as of 9:26 a.m. 

It has risen 26.61% in the last 12 months and 22.54% on a year-to-date basis. Total traded volume so far in the day stood at 21 times its 30-day average. The relative strength index was at 52.05.

Of the 41 analysts tracking Marico, 30 have a 'buy' rating on the stock, seven recommend a 'hold' and four suggest a 'sell', according to Bloomberg data. The average of 12-month analysts' price targets implies a potential upside of 6.8%.