In its latest research report, Mirae Asset Sharekhan has reiterated a BUY rating on Marico Limited, setting a price target of Rs 825. The report underscores Marico’s robust positioning in the Indian consumer goods sector, highlighting its resilience amid inflationary headwinds, strategic price hikes, and a focus on high-margin segments. As rural demand rebounds and urban consumption remains steady, Marico is poised for double-digit revenue and earnings growth. The stock, currently trading at Rs 731, reflects confidence in the company’s ability to drive profitability through portfolio diversification, operational efficiency, and international expansion. Investors are advised to monitor key input costs and competitive dynamics as potential risks.

Sharekhan’s Stance and Stock Levels

Mirae Asset Sharekhan maintains a resolute BUY call on Marico Ltd, with an unchanged price target of Rs 825 and a current market price (CMP) of Rs 731. The stock trades at 51x and 44x its projected FY26E and FY27E earnings per share, respectively, signifying a premium valuation but justified by the company’s growth trajectory and sector leadership.

Key Financial Metrics and Valuation Benchmarks

Marico’s financial performance demonstrates resilience and growth:

FY25 consolidated revenue reached Rs 10,831 crore, marking a 12.2% year-on-year increase, with 5% volume growth.

Adjusted PAT for FY25 stood at Rs 1,658 crore, up 10.4% YoY.

Operating profit margin (OPM) for FY25 was 19.7%, down 124 basis points YoY, reflecting input cost pressures.

The company projects FY26E/FY27E EPS at Rs 14.3 and Rs 16.5, respectively.

Return on Net Worth (RoNW) and Return on Capital Employed (RoCE) remain robust, with FY26E RoCE at 45.2%.

Valuation multiples remain elevated, reflecting sector confidence:

FY26E P/E: 51.0x, FY27E P/E: 44.3x

FY26E EV/EBITDA: 37.5x, FY27E EV/EBITDA: 32.4x

Business Update: Volume Recovery and Revenue Momentum

Q1FY26 witnessed sequential improvement in volume growth, driven by rural revival and steady urban demand. Management expects this trend to continue, supported by easing inflation, favorable monsoon, and policy stimulus. Consolidated revenue grew in the low twenties on a YoY basis, with international business delivering high-teen constant currency growth.

Price hikes across the portfolio have been a key lever for revenue growth, though much of the recent topline expansion is price-led rather than volume-driven. The company anticipates a gradual improvement in demand trends and volume growth in the coming quarters.

Segmental Performance: Core Strengths and New Frontiers

Marico’s core franchises continue to anchor performance:

Parachute Coconut Oil faced marginal volume decline due to hyperinflationary input costs, but normalized volumes remained positive.

Saffola Oils posted high-twenties revenue growth, benefiting from mid-single digit volume growth and proactive price adjustments following import duty cuts.

Value-added Hair Oils grew in low double digits, driven by sustained traction in mid and premium segments.

Foods and Premium Personal Care, including digital-first brands, maintained accelerated scale-up and stable profitability.

Margin Dynamics and Cost Pressures

Gross margins remain under incremental pressure in Q1FY26, attributed to elevated copra prices and a high base effect. While vegetable oil prices have eased, input cost inflation, particularly for copra (comprising ~40% of input costs), continues to challenge profitability. Despite these headwinds, Marico expects modest YoY operating profit growth in Q1, with gross margin relief anticipated from H2FY26 as input prices stabilize.

Strategic Outlook: Portfolio Diversification and International Expansion

Marico’s three-pronged strategy focuses on:

Driving growth in key categories (coconut oil, VAHO, Saffola)

Innovation and entry into niche, premium categories (male grooming, premium hair nourishment, healthy foods)

Scaling up international presence, with 25% of revenue from overseas markets across Asia and Africa

Portfolio diversification into premium foods and personal care products is expected to enhance the revenue growth trajectory and margin profile over the medium to long term.

Peer Comparison: Valuation and Return Metrics

Marico’s valuation is at par with sector leaders, reflecting its strong fundamentals:

Risks and Watchpoints for Investors

Investors should remain vigilant of the following key risks:

A sharp escalation in input prices, especially copra, could further compress margins.

Prolonged macroeconomic uncertainty in international markets, notably Bangladesh, may impact overseas performance.

Intensifying competition in core categories, such as VAHO and edible oils, could threaten revenue growth.

Shareholding Structure and Investor Profile

Marico’s shareholding is dominated by promoters (59.1%), with significant FII (22.4%) and DII (14.2%) participation. The top institutional shareholders include Life Insurance Corp of India (3.00%), Blackrock Inc. (2.27%), and HDFC Asset Management Co. Ltd. (1.84%).

Stock Performance and Technical Levels

Marico has delivered a 20.2% absolute return over the past 12 months, outperforming the Sensex by 16%. The stock’s 52-week high and low stand at Rs 745 and Rs 578, respectively. With a current price of Rs 731 and a target of Rs 825, the upside potential remains attractive for long-term investors.

Investment Thesis and Actionable Levels for Investors

Mirae Asset Sharekhan’s BUY recommendation is underpinned by Marico’s sector leadership, resilient financials, and strategic pivot towards high-margin segments. Gradual recovery in volumes, margin expansion from H2FY26, and portfolio diversification are expected to drive sustainable earnings growth. Investors are advised to accumulate the stock at current levels (Rs 731), with a medium-term target of Rs 825, while keeping an eye on input cost trends and competitive pressures.