SBICAP maintains hold rating on Marico, target price Rs 335

SBICAP has maintained its hold rating on Marico in the long term with a target price of Rs 335. Shares of Marico closed at Rs 356 apiece, up 0.3% on Thursday while the BSE Sensex fell 76.47 points to 40,575.17.

Company Financials

For the quarter ended 30-09-2019, the company has reported consolidated sales of Rs 1829.00 crore, down -15.56% from last quarter sales of Rs 2166.00 crore and down -.43% from last year same quarter sales of Rs 1836.82 crore. The company has reported net profit after tax of Rs 252.00 crore in the latest quarter.


Investment Rationale

The brokerage belives core Indian hair oil revenue of Marico will be under stress along with Saffola edible oil. Further, expansion in adjacent categories is likely to outgrow overall company growth. With several FMCG companies noting weak demand, the brokerage expects the topline growth guidance of Marico’s core portfolio to be at risk.