Marico share price has been under pressure lately after hitting a 52-week high of ₹889.95 on 31 July. However, the recent correction could be an opportunity to buy the stock, according to brokerage firm Nuvama Wealth Management.
Nuvama stock performance
On a monthly scale, are down 3% so far in September after an almost 5% decline in August when it snapped its four-month winning streak.
Year-to-date, however, the FMCG stock is still up more than 5% compared to a 12% fall in equity benchmark Sensex. The stock touched a 52-week low of ₹690.40 on 29 September last year.
In intraday trade on Thursday, 10 September, the stock declined more than 1%, looking set to extend losses for the second consecutive session.
Nuvama shareholding pattern
According to shareholding pattern data on the BSE, by the end of the June quarter of FY27, HDFC Mutual Fund held 3,21,51,500 shares, equivalent to 2.48% stake, in the company.
Life Insurance Corporation of India (LIC) is also among a key shareholder of the company, as it held 2,16,20,975 shares, or 1.67% stake, in the company by the end of the June quarter.
Foreign portfolio investors (FPIs) cumulatively held 30,38,11,356 shares, or 23.44% stake in the company by the end of the above-mentioned quarter.
Marico a stock to buy, says Nuvama
Nuvama Wealth Management, in its report on 8 September, maintained a buy call on the shares of the maker of Parachute coconut oil, with a target price of ₹1,015. This implies an upside potential of 25% from the stock’s 9 September closing of ₹810.25 on the BSE.
Nuvama retained its bullish view on the stock after meeting with the company’s MD and CEO Saugata Gupta.
According to the brokerage firm, the company expects high single-digit India volume growth in FY27. Meanwhile, an 11% rise in Q1FY27 volume was a 20-quarter high.
Nuvama also underscored that Marico’s MD reiterated a double-digit revenue growth with revenue crossing ₹15,000 crore in FY27 and ₹20,000 crore by FY30, while EBITDA margin may expand by 140–150 basis points in FY27.
Nuvama further said that Marico’s India business may sustain high single-digit volume growth, while international business may grow in mid-teens in constant currency terms.
The volume growth of Parachute and Saffola edible oil may be in mid-single-digit, while that of VAHO (value-added hair oils) may grow in double digits.
“By FY30, the company targets a double-digit revenue CAGR led by top-quartile volume growth and a mid-teens EBITDA CAGR. International business is targeted to clock a CAGR in teens in constant currency terms by FY30,” said Nuvama.
On the premiumisation trend, Nuvama said Marico targets the salience of the mass segment, or commodity-linked categories, to reduce to 56% in FY27 and 50% by FY30 versus 63% in FY26, while that of the premium segment is likely to increase from 37% in FY26 to 50% in FY30.
“India revenue share of the foods and premium personal care portfolios (including digital-first) will expand to nearly 27% in FY27 compared to the earlier guidance of 25% and nearly 33% by FY30 versus 23% in FY26. Share of India profits has moved to nearly 5 times FY20 levels in FY26 and is likely to rise to nearly 10 times FY20 levels by FY30. Foods revenue is projected to grow nearly 9 times by FY27 and nearly 15 times by FY30 versus 4 times in FY24,” said Nuvama.
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Disclaimer: This article is for educational purposes only and does not constitute investment advice. The views and recommendations expressed are those of the broking firm, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.