Global research firm Citi has maintained its buy rating on Marico with a target price of Rs 585 a share, indicating an upside potential of over 17 percent from the current market price. This news may have caused a positive sentiment among investors, leading to an increase in the stock price by over 1 percent intraday on February 21.
At 11.56 am, Marico was trading at Rs 496.50, up Rs 7.80, or 1.60 percent, on BSE. It has touched an intraday high of Rs 499.65 and an intraday low of Rs 491.85.
Citi is optimistic about Marico’s performance, expecting a healthy uptick across its business segments starting Q4 FY23. The research firm also noted that Marico’s volume growth had accelerated in core brands and the company’s foods and digital brands are on track.
Citi believes that there is room for the stock’s valuation gap against its peers to narrow.
Marico’s Q3 FY23 financial results show an increase in consolidated net profit at Rs 333 crore, up 5.04 percent from the previous year. The company’s revenue from operations also increased by 2.61 percent during the quarter under review.
Marico’s MD & CEO Saugata Gupta sees a gradual recovery for the FMCG sector, with rural markets making a comeback. He also expects better margins in the top-line as inflation eases.
Gupta said that the urban market and modern trade channels are recovering and going back to pre-Covid levels, while the general trade is doing well in food. Saffola, the master brand under which Marico offers healthier food options, is now worth over Rs 2,000 crore.