What's next for Marico shares post Q4 business update? Brokerages decode

Shares of Marico are in focus post its Q4 business update. In Q4, the domestic business posted a slight uptick in volume growth on a sequential basis owing to steadying trends in majority of the portfolios, the company said.

"Amidst the backdrop of improving macro-indicators, we expect a gradual uptick in the growth of our core categories through the ongoing initiatives to enhance the profitability of our General Trade (GT) channel partners and focused investments towards a transformative expansion in our direct reach footprint across urban and rural outlets over the next couple of years," Marico said.

The company said that the International business reverted to clocking double-digit constant currency growth, led by Bangladesh bouncing back from transient headwinds and rest of the markets maintaining their positive momentum.

"Consolidated revenue grew in low single digits, moving back into positive territory after 3 quarters, due to incremental anniversarizaton of pricing cuts in key domestic portfolios. We expect consolidated revenue growth to trend upwards, with domestic revenue growth outpacing volume growth in the quarters ahead," it added.

What's next?

Macquarie has maintained its 'Outperform' rating on the stock with a target price of Rs 600. It expects 4 per cent decline in sales and 15 per cent EBITDA growth in the fourth quarter of FY24.

Morgan Stanley has an Equal-Weight call with a target of Rs 533. It said that company met its earlier stated target of positive revenue growth in Q4 and margin for FY24 and targets for new businesses.

However, CLSA has a Sell call with a target of Rs 451. Its expectation for consolidated revenue growth is 2.8 per cent topline growth. It noted that the Q4 update stated consolidated revenue growth would be in the low-single digits.

Also, the consolidated revenue estimate is a slight decline to what consensus expects.

About Marico

Marico is one of India’s leading consumer products companies in the global beauty and wellness space. Its portfolio brands include names like Parachute, Saffola,

Saffola FITTIFY, Hair & Care, Parachute Advansed, Nihar Naturals, Mediker, Pure Sense, Coco Soul, Revive, Set Wet, Livon, Beardo, Just Herbs, True Elements and Plix.

The international consumer products portfolio contributes to about 25% of the Group’s revenue, with brands like Parachute, Parachute Advansed, HairCode, Fiancée, Purité de Prôvence, Ôliv, Caivil, Hercules, Black Chic, Code 10, Ingwe, X-Men, Thuan Phat and Isoplus.

At 12:04 hours, the shares were trading 1.82 per cent higher at Rs 518.65 on BSE on Monday.