Marico Stock Price Target Raised to Rs 875 by Prabhudas Lilladher

Marico Sees Upsurge in Earnings Estimates

Prabhudas Lilladher's latest research report on Marico (MRCO) reveals a significant increase in FY27/28 earnings per share (EPS) estimates. The upward revision is driven by several key factors, including the company's guidance on sustaining high single-digit volume growth, a healthy near-term demand outlook, and continued gains resulting from the Goods and Services Tax (GST) implementation.

Furthermore, the report highlights a 35% decline in copra prices, which is expected to contribute to margin recovery. Additionally, the sustained traction in foods/FMCG and digital first brands, as well as the rising share of premium products in the portfolio (44% in FY27 and 50% in FY30), are expected to boost earnings.

In its vision for 2030, MRCO has set ambitious targets, including double-digit sales growth and mid-teens earnings before interest, tax, depreciation, and amortization (EBITDA) compound annual growth rate (CAGR). This is expected to be driven by steady growth in the core portfolio, strong double-digit growth in Foods/PC and Digital First portfolio, and an improving margin trajectory.

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Key Highlights

The research report notes that MRCO has successfully executed its sales transformation strategy, focusing on foods and acquisitions in the B2C foods/PC portfolio. Additionally, the decline in the share of sales from Bangladesh (from 50% of IBD in FY20 to 35% by FY30) is expected to improve the overall health of IBD.

Based on these factors, Prabhudas Lilladher has valued MRCO at 46x Mar28 EPS and assigned a target price of Rs 875. The research firm has retained its "Accumulate" rating for the company.

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