05 Aug , 2025 By : Debdeep Gupta
Shares of FMCG major Marico slipped over a percent to Rs 714 in morning trade on August 5 after the company reported an 8.2 percent year-on-year rise in consolidated net profit to Rs 513 crore for the April–June quarter of FY26.
The FMCG major’s revenue from operations rose 23.3 percent to Rs 3,259 crore, driven by broad-based growth across its product portfolio. Operating margin declined sharply to 20.1 percent from 23.7 percent a year earlier, reflecting higher costs.
Morgan Stanley has maintained an Equal-weight rating on Marico with a target price of Rs 674 per share. This implies a downside potential of 6.7 percent from the last close. The company expects a 25 percent revenue growth in FY26, driven by high-single digit growth in both volumes and EBITDA. Among key segments, the management has guided for double-digit value growth in VAHO (Value Added Hair Oils) and over 25 percent growth in its Foods and Digital-first portfolios. Parachute is expected to reflect the full impact of recent price hikes in Q2. However, pricing growth is anticipated to taper off in the second half of the year. Margin headwinds are likely to peak in the first half of FY26 and gradually ease thereafter.
HSBC has a Buy rating on Marico with a higher target price of Rs 850 per share. The company delivered a 1 percent EBITDA beat in Q1FY26, with volume growth supported by a recovery in VAHO. While the outlook for growth remains intact, elevated volatility in copra prices remains a concern. The brokerage has trimmed FY26 PAT estimates by 4.7 percent due to margin guidance cuts but raised FY28 estimates by 1 percent, maintaining a positive long-term view.
The company's value-added hair oils portfolio gained 140 bps in value market share on a MAT basis. Saffola Edible Oils posted mid-single digit volume growth amidst a relatively elevated pricing environment. The brand registered 28 percent revenue growth, while also proactively passing on the benefit of the recent import duty reduction on vegetable oils to consumers, Marico said.
In the International business, Bangladesh posted 17 percent CCG, and Vietnam had a muted quarter but is expected to witness a gradual recovery in the coming quarters.
Marico shares have risen 13 percent since the beginning of the year.
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