Add Marico, target price Rs 785: HDFC Securities

HDFC Securities has an Add call on Marico with a target price of Rs 785. The current market price of Marico is Rs 716.5. Marico, incorporated in 1988, is a Large Cap company with a market cap of Rs 92589.21 crore, operating in the FMCG sector.

Marico's key products/revenue segments include Edible Oil, Others, Personal Care, Export Incentives, Scrap for the year ending 31-Mar-2024.



Financials
For the quarter ended 31-03-2025, the company has reported a Consolidated Total Income of Rs 2,777 crore, down -2.08% from last quarter Total Income of Rs 2,836 crore and up 21.11% from last year same quarter Total Income of Rs 2,293 crore. The company has reported net profit after tax of Rs 345 crore in the latest quarter.

The company?s top management includes Mr.Harsh Mariwala, Ms.Nayantara Bali, Ms.Apurva Purohit, Mr.Rajeev Vasudeva, Mr.Milind Barve, Mr.Ananth Sankaranarayanan, Mr.Rajendra Mariwala, Mr.Rishabh Mariwala, Mr.Nikhil Khattau, Mr.Saugata Gupta, Mr.Rajan Bharti Mittal. Company has B S R & Co. LLP as its auditors. As on 31-03-2025, the company has a total of 130 crore shares outstanding.

Investment Rationale
Marico's Q4FY25 results were ahead of HDFC Securities' estimates, with domestic volume growth of 7% vs. our expectations of 4-5%, higher owing to solid offtake in foods and digital first brands. However, profitability remained strained, given the inflation in key RM and high advertising costs. The brokerage maintains its Add rating on Marico with a target price of Rs 785/share (50x its FY27 consolidated EPS, 22% premium to its 5-yr average PE), with revenue/EBITDA/PAT CAGRs of 9/11/11% for FY25-FY28E. In our view, the growth will be driven by 1) strong performance of the domestic business led by Parachute (estimating MSD volume growth), Saffola edible oil (price hike led growth), VAHO (easing competitive intensity), and improving profitability of the foods and digital-first business and 2) sustained double-digit CCG momentum in the international business (reported numbers to improve as currency headwinds subside).

Promoter/FII Holdings
Promoters held 59.05 per cent stake in the company as of 31-Mar-2025, while FIIs owned 22.09 per cent, DIIs 13.98 per cent.