Marico shares jump 6% as strong Q2 puts growth story in overdrive, sparks bullish calls

Its earnings before interest, taxes, depreciation and amortisation (EBITDA) increased 27% YoY to Rs 709 crore, against Rs 560 crore in the year-ago quarter. EBITDA margin expanded 200 basis points to 18.2% from 16.2% in Q2 FY26.Marico's gross margin expanded approximately 600 basis points year-on-year, supported by moderation in copra prices and a favourable portfolio mix. The company's India business recorded 10% underlying volume growth, while its international business reported 13% constant currency growth (CCG).

The latest target price implies 29% upside potential for what the international brokerage called ‘Mr Consistent is getting even better’.Live EventsJefferies said the compounding flywheel continues, with volume and EBITDA growth at multi-year highs. The core portfolio grew strongly, further supported by robust performance in foods and PPC. The company’s management raised FY27 guidance and, interestingly, now expects to hit its Rs 200 billion FY30 revenue target a year early, Jefferies noted.

“Clearly, at a time when peers are seeing patchy trends, Marico stands out as a compounding machine, as reflected in its premium valuation relative to peers,” the international brokerage said.In its base case, Jefferies forecast a 10% CAGR in revenue with 14% CAGR in earnings over FY26-29.Systematix on Marico share priceSystematix Institutional Equities maintained its ‘Buy’ rating on the shares of Marico with a target price of Rs 960 apiece.

The brokerage noted that the company delivered another quarter of healthy earnings beat with Q2 operating results ahead of estimates.Marico remains in a sweet spot of robust volume growth (7-11% over the past six quarters) supplemented by double-digit topline growth, cherry-topped with a margin rebound. With Parachute pricing easing in FY27 as copra moderates, we expect sturdy volume growth to sustain going forward,” it said, naming the FMCG major a preferred pick, one of few large-cap names growing earnings at FY26-FY29 CAGR of 17% yet available at FY28E P/E of 40x.Dolat Capital on Marico share priceDolat Capital upgraded its rating on the shares of Marico to ‘Buy’ and raised the target price to Rs 1,025 apiece.

It noted that the company delivered healthy growth across its core portfolio along with improving contribution from newer businesses.The sharp improvement in profitability, coupled with management’s upgraded growth outlook, provides greater confidence in the sustainability of its growth, it added. This comes even as the broader Nifty Midcap 50 index dropped 4% at the same time amid multiple headwinds.The shares of the FMCG major have gained around 11% in one year.

In the longer term, the stock delivered positive returns of more than 51% in three years and 44% in five years. The company has a market capitalisation of nearly Rs 1.04 lakh crore.Disclaimer: This article has been written by Debaroti Adhikary, who is not a SEBI-registered Research Analyst or an Investment Adviser. Debaroti Adhikary and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication.

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