Marico Q1 Results Review - Core Portfolio Tepid, Peaked Out Margins: Prabhudas Lilladher

Prabhudas Lilladher Report

Marico Ltd. reported inline numbers with surprise on gross margin led by benign input costs and favorable portfolio mix. However we downgrade stock to Hold from Accumulate given-

1. Peaked out margin with no major expansion expected in near term,

2. Persistent sluggishness in Parachute/Saffola/value added hair oil (72% of domestic sales),

3. Growth concerns in Bangladesh given recent turmoil and unrest.

Innovation funnel remains strong with portfolio diversification and scale up in foods, D2C portfolio and B2C acquisitions. Beardo is likely to end FY25 with double-digit Ebitda margins, Marico plans to adopt the same strategy for scaling digital-first franchises and targets double-digit margins by FY27.

We factor in 11.7% sales growth and 10.4% PAT CAGR over FY24-26 We value Marico at 46 times Sep’26 EPS and assign a target price of Rs 681 (Rs 621 earlier).

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.