Marico shares in focus after 9% YoY growth in Q1 PAT. Should you buy?
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Motilal Oswal: Buy| Target price: Rs 825
Avendus: Buy| Target price: Rs 832
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Shares of Marico Ltd. are likely to be in focus on Tuesday, after the consumer goods major reported a 9% year-on-year (YoY) rise in consolidated net profit for the June 2025 quarter. The company posted a profit of Rs 504 crore, up from Rs 464 crore in the same period last year, driven by strong international performance and price-led growth in its domestic business.Revenue from operations jumped 23% YoY to Rs 3,259 crore, compared to Rs 2,643 crore in Q1FY25, marking a strong topline expansion despite margin pressures.However, on the operating front, EBITDA rose 5% YoY to Rs 655 crore, while the EBITDA margin declined to 20.1% from 23.7% due to elevated input costs, particularly in raw materials.On Monday, Marico shares closed 1.8% higher at Rs 723.15 on the BSE.Motilal Oswal has maintained a 'Buy' rating on Marico with a target price of Rs 825.The company's growth scorecard remains intact, although there is a slight delay in margin recovery. Rising input costs may impact near-term margins, but the outlook for the second half of FY26 remains positive. Revenue outperformance continues, supported by a 9% volume growth. Marico aims to achieve double-digit PAT CAGR over the next two years and is projected to deliver 11% PAT CAGR between FY25 and FY28. However, FY26 EPS estimates have been cut due to recent copra inflation, while FY27 and FY28 EPS estimates are maintained.Avendus has maintained a 'Buy' rating on Marico, raising the target price to Rs 832 from Rs 810.The firm has revised its revenue estimates upward by around 5% for FY26 and FY27. The outlook factors in near-term tailwinds from pricing actions, recovery in the VAHO segment, and sustained traction in the non-oils portfolio. Despite the expanding revenue base, high raw material prices are expected to keep margins under pressure through FY26. EBITDA growth in FY26 is expected to lag the topline, but a sharp margin rebound of around 20% is projected by FY27.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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