Why Multiple Brokerages Are Hiking Estimates For This FMCG Major After Q4 Results

Shares of consumer goods major Marico were surging on Tuesday after strong results drove brokerages to hike ratings on the stock.

What Happened: In the fourth quarter, Marico reported a consolidated net profit of ₹320 crore, marking a 5% increase from the previous year. Revenue also rose by 1.7% year-on-year to ₹2,278 crore. Despite EBIDTA slightly missing expectations at ₹442 crore, these figures were broadly in line with analyst forecasts.

Analysts’ bullish stance on the fast-moving consumer goods company is rooted in improving demand dynamics and management’s commitment to bolster volumes and market share. While premium and urban-centric segments outperformed rural and mass segments, a revival in rural sentiment was observed towards the end of the quarter.

Analyst Ratings: According to Motilal Oswal analysts, factors such as rural market improvement, market share gains, accelerated growth in foods and premium personal care, healthy international business expansion and normalised price cuts position Marico for better revenue performance in FY25-26.

The company management anticipates double-digit revenue growth in FY25, driven by robust volume expansion. Initiatives like “Project SETU” aim to enhance distribution reach, particularly in general trade.

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Citi reiterated its “buy” recommendation and raised the target price to ₹610 per share, citing expectations of an improved growth trajectory driven by volume acceleration and pricing strategies. The brokerage highlighted the positive contributions expected from the company’s digital-first portfolio and international business growth.

Nuvama upgraded Marico to “buy” from “hold” with a raised target price of ₹640 per share, emphasizing the need for aggressive innovation and product promotion across channels. Anticipating a revival in rural demand, Nuvama views Marico as well-positioned to benefit, given its significant rural presence.

Motilal maintained a “buy” rating with a target price of ₹625 per share. Motilal Oswal analysts forecast a 10% earnings per share compound annual growth over the next two financial years, reflecting sustained double-digit EBITDA growth.

HDFC Securities also upgraded the stock from “add” to “buy” with a target price of ₹650. The brokerage said that Project SETU should help drive market share gains across categories in urban and rural areas and enhance assortment levels in urban stores, thereby enabling diversification & premiumisation in the domestic business.

However, CLSA maintained a “sell” rating with a target price of ₹460 per share, expressing concerns about potential trade-offs between margin improvement and growth. The brokerage highlighted ongoing challenges in core categories and distribution expansion efforts through “Project Setu”.

Price Action: Marico’s share price was up 7.13% at ₹568.10 in early trade on Tuesday.

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