Buy Marico, target price Rs 590: Motilal Oswal Financial Services

Motilal Oswal Financial Services has buy call on Marico with a target price of Rs 590. The current market price of Marico is Rs 483.7.

Marico, incorporated in the year 1988, is a Large Cap company (having a market cap of Rs 62026.14 Crore) operating in FMCG sector.

Marico key Products/Revenue Segments include Edible Oil, Others, Personal Care, Export Incentives, Scrap for the year ending 31-Mar-2022.


Financials
For the quarter ended 31-12-2022, the company has reported a Consolidated Total Income of Rs 2510.00 Crore, down -.20 % from last quarter Total Income of Rs 2515.00 Crore and up 3.33 % from last year same quarter Total Income of Rs 2429.00 Crore. Company has reported net profit after tax of Rs 333.00 Crore in latest quarter.

The company’s top management includes Mr.Harsh Mariwala, Mr.Apurva Purohit, Mr.Milind Barve, Mr.Ananth Sankaranarayanan, Mr.Nayantara Bali, Ms.Hema Ravichandar, Mr.Nikhil Khattau, Mr.Rishabh Mariwala, Mr.Rajendra Mariwala, Mr.Saugata Gupta, Mr.Rajeev Vasudeva. Company has B S R & Co. LLP as its auditors. As on 31-12-2022, the company has a total of 129 Crore shares outstanding.

Investment Rationale
The much-needed diversification could lead to higher multiples than in the past. The company’s valuations at 42.2x/37.3x FY24E/FY25E EPS appear inexpensive, given the potential of strong earnings growth (v/s earlier) and a healthy ROE (around late-30%).

Promoter/FII Holdings
Promoters held 59.48 per cent stake in the company as of 31-Dec-2022, while FIIs owned 25.07 per cent, DIIs 9.66 per cent.