Marico share price plunged over 4% on Tuesday after the political unrest in Bangladesh which contributes to a major part of the company’s international business. Marico shares declined as much as 4.43% to ₹642.55 apiece on the BSE.
After days of massive violent protest, the political crisis in Bangladesh escalated and Prime Minister Sheikh Hasina stepped down on Monday and fled the country for a ‘safer place’. The country’s army will now form an interim government.
Bangladesh contributes approximately 12% to Marico's consolidated revenue and accounts for around 44% of the company's international revenue. The company, in its Q1FY25 earnings presentation, said that it intends to bring down the contribution from Bangladesh to less than 40% of the international revenue by the end of financial year 2027 from 51% in FY22.
Marico, the Parachute Coconut Oil maker, reported largely in-line earnings for the first quarter of FY25, with a decent growth in net profit and topline, driven by 4% domestic business volume growth.
FMCG major Marico’s net profit in Q1FY25 rose 8.66% to ₹464 crore from ₹427 crore in the same quarter the previous year. The company recorded a 6.7% revenue growth to ₹2,643 crore from ₹2,477 crore, YoY. The company’s India revenues increased 7.38% YoY to ₹1,926 crore.
In the medium term, Marico aims to deliver double-digit revenue growth and double-digit constant currency growth in the International business. It expects operating margin to inch up over the next few years with leverage benefits as well as premiumisation of the portfolios across both the India and International businesses.
Analysts cheered the revenue guidance and margin expansion plans of Marico and have raised their prices on the FMCG stock.
“Marico is seeing good growth in domestic business execution on both, topline and margin. We like its topline focus, but any attempt to expand margin further would limit execution, in our view. We build in 10% topline/12% earnings CAGR over FY24-27E. Factoring in the better execution, we lift our target multiple to 47x from 42x, now at 10% premium to its historical avg fwd P/E,” said Nitin Gupta, Senior Research Analyst at Emkay Global Financial Services.
The brokerage firm retained its ‘Reduce’ rating on Marico shares and raised the June 2025 target price to ₹700 per share from ₹630 earlier.
Marico’s Q1FY25 operational performance was ahead of Antique Stock Broking’s expectations. Post the Q1 results, the brokerage firm increased its target multiple to 50x PER (previously 45x) based on improvement in performance on management initiatives. It expects sales and earnings CAGR of 12% and 15% over FY24–27E.
The brokerage firm expects Marico’s performance to improve on the back of distribution-led growth in the core portfolio, Improving profitability and contribution of food & premium personal care products (from 20% to 25% over FY24-27). It maintained a ‘Buy’ recommendation and raised Marico share price target to ₹801 per share from ₹721 earlier.
Given the company’s market share gains and pricing power in the key franchise, Nuvama Institutional Equities raised FY26E EPS estimates by 4% and target PE to 45x from 40x. It retained a ‘Buy’ call on Marico shares and hiked the target price to ₹780 apiece from ₹640 earlier.
Key risks include adverse macros in Bangladesh which accounts for 11–12% of the company’s revenue.
Marico share price has rallied more than 22% in the last three months, and Motilal Oswal believes that rich valuation will sustain given earnings acceleration. It values Marico stock based on 50x June 2026 EPS estimates to arrive at a target price of ₹750 per share and reiterates its ‘Buy’ rating on the stock.
At 10:45 am, Marico shares were trading 3.69% lower at ₹647.60 apiece on the BSE.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
