Today, shares of Marico Ltd. went up by more than 9% after the company said that its net profit for the quarter that ended in March 2023 went up by 19%. The stock shot up 9.29% on BSE, from Rs 493.65 at the end of the day to Rs 539.5. The big cap stock has gone up 4% since the beginning of this year and has gone up 5.32 percent in the past year. On BSE, the company’s market value went up to Rs 68,404 crore. On April 20, 2023, the company hit a 52-week low of Rs 462.95, and on September 23, 2022, it hit a 52-week high of Rs 554.05. A total of 2.66 million shares changed hands, which brought in Rs 14.19 crore. The 5-day, 20-day, 50-day, 100-day, and 200-day moving averages are all higher than the price of Marico shares right now.
In the January-March quarter, the company made Rs 305 crore, which is 18.67% more than the Rs 257 crore it made in the same quarter last year. The profit for the December quarter was Rs 333 crore, which means that from one quarter to the next, it went down by 8.40%.
Amnish Aggarwal, who is the head of research at Prabhudas Lilladher, said that the stock of Marico should be worth Rs 550. In a report about earnings, he said, “We are increasing our EPS estimates for FY24/25 by 1.9%/1.9% and changing our grade from Hold to Accumulate because the EBITDA margin growth guidance is better than 100bps in FY24.” Positives include 9% volume growth in Parachute, 5% volume growth in the U.S. as a whole, and signs of life in rural market. We give Marico a goal price of Rs 550 (based on 42xDec24 EPS) and value it at 42xFY25 EPS. Upgrade to Accumulate.”
After Marico’s Q4 numbers, YES Securities expects the stock price to go up by 15.5%, to Rs 570.
Going forward, as pricing interventions start to take effect in 1HFY24, anticipate a steady increase in Marico’s revenue growth in India. This, along with falling input prices and a good mix, should cause the EBITDA margin to grow by more than 100 bps. The firm said, “There are only small changes to our FY23E/FY24E EPS, and we continue to keep our ADD rating with a target price (TP) of Rs 570.”
JM Financial changed its price goal for the stock from Rs 575 to Rs 585. The difference between the new price target and the present market price is 18.4%.
“We think Marico is well-positioned to deliver an operating profit rise in the mid- to high teens in FY24,” they said. The stock is now selling below its five-year average, which means that valuations are not as high. Gross margin looks pretty good for FY24, and the company is aiming for a possible 200-250bps gain. While it makes sense that some of the GPM cushion would be used to bring A&P’s spending up to more than 9% of sales (from 8.6% in FY23), our calculations show that the EBITDA margin is likely to hit 20% in the coming year, since there are no other cost items that could possibly cut into it, the brokerage said.
Motilal Oswal set a price goal of Rs 590, which is 20% more than what the market price is right now.
“The forecast for gross margins and EBITDA margins is slowly getting better. Overall, there are signs that consumption is getting better, and it’s possible that the rural sector has hit bottom since the trend of falling volume has stopped. This should improve MRCO’s chances of making more money in the future. Valuations are cheap at 43x/37.5x FY24/FY25 EPS. According to the financial services company, we reiterate our BUY rating on the stock.
In Q4, revenue from business went up 3.65%, from Rs 2161 crore to Rs 2240 crore. In the December quarter, sales were worth Rs 2,470 crore.
EBITDA went up 14%, from Rs 346 crore in Q4 of the previous fiscal year to Rs 393 crore in Q4 of the current fiscal year.
In its statement regarding the company’s outlook for FY 24, the consumer goods company stated, “In the domestic business, we will drive volume-led growth and market share gains across our portfolios, assisted by distribution expansion, aggressive cost controls, and adequate investment in market development and brand building.”
As price changes are made in the first half of FY24, the company expects sales growth to slowly pick up. Even though some countries have had problems with their economies as a whole, the International business has always done well.
