Marico rallies 4%, hits new high post Q1 biz. Should you buy, hold or sell?

Business Standard

7 hours ago

Marico share price today: Shares of FMCG major Marico hit a new high of ₹745, as the scrip rallied 4 per cent on the BSE in Friday's intra-day trade after the company said consolidated revenue in June 2025 quarter (Q1FY26) grew in the low-20s year-on-year (Y-o-Y), backed by a strengthening volume trajectory.
The company expects gradual improvement in overall consumption sentiment on the back of easing inflation, a favourable monsoon season and policy stimulus.
The stock price of the edible oil company has surpassed its previous high of ₹740, which it had touched on May 8, 2025. Thus far in the calendar year 2025, Marico has outperformed the market by surging 15 per cent, as against 6 per cent rise in the BSE Sensex.
Marico Q1FY26 biz update
During the quarter, the sector exhibited consistent demand patterns, marked by improving trends in rural markets and steady urban sentiment. Marico said it expects gradual improvement in the quarters ahead, supported by easing inflation, a favourable monsoon season and policy stimulus.
Amidst this backdrop, underlying volume growth in the India business continued to improve sequentially to reach a multi-quarter high, driven by positive trends in the core franchises and continuous scale up of new businesses.
Marico's domestic business underlying volume growth continued to improve quarter-on-quarter (QoQ) to reach multi-quarter high vs. 4 per cent volume growth in Q1FY25 and 7 per cent volume growth in Q4FY25.
Overall consolidated revenues are expected to grow in the low twenties in Q1FY26. Inflated copra prices will continue to put stress on the gross margins. This along with higher media spends will lead to Ebitda growing modestly during the quarter.
However, Marico expects gross margin pressures to ease from the second half of this fiscal year. Despite the input cost push, the company said it maintained brand building investments in line with our strategic intent to strengthen the long-term equity of franchises and accelerate portfolio diversification. In the given context, Marico said it expects modest operating profit growth on a year-on-year basis.
Brokerages view on Marico
ICICI Securities expects Marico's revenues to grow by ~21 per cent and EBIDTA to grow by 5 per cent with EBIDTA margins declining by 318bps to 20.5 per cent. The highlight of the quarter was volume growth recovering sequentially and expected to be at 9 per cent in Q1FY26, which is the strong start to the fiscal. Recovery in the Saffola Edible oil portfolio and the VAHO growth is key to overall recovery in the volume growth and maintaining the double digit revenue growth momentum in the quarters ahead. Any stability in the copra prices will help volume growth in Parachute to improve and reduce stress on the margins in the near term (likely from H2FY26).
'Marico remains one of our top picks in the FMCG space and we maintain our Buy recommendation on the stock,' the brokerage firm said in a note.
Elara Capital maintains a constructive view on Marico, underpinned by its strong medium term potential to deliver double-digit sales growth. This optimism is driven by a combination of strategic price increases, enhanced direct distribution capabilities, and robust momentum in its foods and premium personal care segments. Additionally, as its new business verticals continue to scale, the brokerage firm expects upside to margin in the long term, further reinforcing its positive stance. Analysts reiterate Accumulate rating with a higher target price of ₹785 on 50x FY27E P/E.
About Marico
Marico is one of India's leading consumer products companies operating in the global beauty and wellness categories.
Marico's portfolio of brands include Parachute, Saffola, Hair & Care, Parachute Advansed, Nihar Naturals, Mediker, Pure Sense, Coco Soul, Revive, Set Wet, Livon, Beardo, Just Herbs, True Elements and Plix. The overseas consumer products portfolio contributes to about 25 per cent of the Group's revenue.