Marico Share Slips Over 1% After Giving Up Early Gains Despite Strong Q1 Business Update

Mumbai, July 3: Marico share price fell more than 1% on Friday after surrendering early gains that had briefly taken the stock to a one-year high following the FMCG major’s upbeat June-quarter business update. The stock touched a 52-week high of Rs 873 soon after the opening bell before reversing course and trading in the red for the rest of the session. 

The company said it expects consolidated revenue growth in the “early twenties” for the June quarter, driven by strong performance across its India, digital and international businesses. However, investors appeared to book profits after the stock’s recent rally despite the better-than-expected outlook. As of writing the stock was down 1.4% at Rs 843.90. 

India business delivers multi-quarter high volume growth 

Marico said its India business witnessed further acceleration during the quarter, with underlying volume growth reaching a multi-quarter high and clocking double digits. 

Stock has risen over 2% over a week versus Nifty Midcap 50 rising over 1% during the period. Source: NSE 

The company said demand trends remained stable during the quarter and expressed optimism about consumption while continuing to monitor inflationary pressures and the progress of the monsoon. 

Its flagship Parachute Coconut Oil franchise reported double-digit volume growth, marking its strongest performance in several quarters. Meanwhile, the Value-Added Hair Oils segment posted revenue growth in the twenties, aided by premiumisation and healthy traction across key brands. 

Margins likely to improve 

Marico said copra prices have corrected nearly 45% from their peak, although they remain above historical averages. The easing in input costs is expected to support sequential improvement in gross margins. 

However, prices of crude oil derivatives and vegetable oils rose during the quarter. The company also increased investments in advertising and brand-building initiatives but still expects healthy operating profit growth, supported by strong revenue momentum and easing copra costs. 

Overseas business maintains momentum 

The international business delivered mid-teen constant currency growth, led by Vietnam and the Middle East and North Africa (MENA) region. 

Bangladesh saw some moderation because of price anniversarisation and subdued consumer demand amid persistent inflation. 

Brokerages remain constructive 

Brokerages viewed the quarterly update positively, saying the company exceeded expectations. 

Analysts expect robust operating profit expansion. Some forecast EBITDA growth in the high teens on the back of improving margins. 

They said the strong start to the financial year reinforces confidence, with management remaining focused on delivering sustainable, profitable and volume-led growth. 

Source

•  https://www.nseindia.com/get-quote/equity/MARICO/Marico-Limited