SBICAP Securities maintains hold on Marico, target price Rs 380

SBICAP Securities has maintained its hold rating on Marico in the long term with a target price of Rs 380 based on its last 5-year average forward PE of 38x. Marico stock declined 6.45% to Rs 366.40 on Tuesday while BSE Sensex closed 581.64 points up at 39,831.84.

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

While the company has embarked on a journey of scaling up its non-core offerings, the brokerage thinks fixing issues in the core is more critical in the near term. Based on weak H1FY20 delivery, we have revised down our topline expectation by 5-6% and this, after adjustment in margin, leads to 3-8% cut in earnings over FY20-FY22, said brokerage.