Shares of Marico surged over 6% on July 8 after the company reported strong business updates for the April-June quarter, indicating continued growth. At 10:12 am, Marico shares were trading at Rs 648 on the NSE.
The company’s consolidated revenue grew by high single digits in Q1 of FY25, with management expecting this upward trend to continue throughout the fiscal year. Gross margin is also likely to expand year-on-year due to a favorable portfolio mix.
Marico’s domestic business saw a modest sequential increase in underlying volume growth. Parachute coconut oil experienced low single-digit volume growth, which management expects to improve as the fiscal year progresses, supported by increased offtake growth. Saffola Oils achieved mid-single-digit volume growth, while Value Added Hair Oils (VAHO) had a slow start due to competitive pressures.
Nuvama Institutional Equities noted that Marico aims for sustainable and profitable volume-led growth over the medium term by strengthening its core brands and scaling new growth areas. Morgan Stanley also expects an improvement in Marico’s revenue and volume growth, driven by higher realizations.
Nuvama projects Marico’s Q1 FY25 revenue, EBITDA, and volumes to grow by 8%, 11%, and 3.5% year-on-year, respectively. For Parachute and Saffola, sales growth is expected to be around 9% and 7%, respectively, driven by a balanced mix of volumes and pricing, while VAHO is likely to remain muted.
Marico’s international segment is expected to perform well, growing by 11% YoY in constant currency terms. The brokerage also anticipates gross and EBITDA margins to expand by 222 basis points and 63 basis points year-on-year, respectively, to 52.2% and 23.8%.
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