Nuvama has maintained its buy rating on Marico with a target price of ₹865 per share after assessing the company’s Q3 business update, which came in slightly ahead of expectations at the revenue and EBITDA level, while volume growth remained in line.
The brokerage expects revenue and EBITDA to grow 27% and 10% YoY, respectively, driven by a combination of pricing actions, favourable mix, and improving contribution from growth segments. While Parachute volumes are likely to see a marginal decline, Nuvama remains constructive on the brand’s underlying health on a normalised basis, citing sustained consumer loyalty and category leadership.
Nuvama raised its growth expectations for VAHO to 22% YoY, higher than its earlier estimate of 18%, reflecting stronger traction in premium hair oil variants. The international business is also expected to grow 22% YoY, supported by improving macro conditions in key overseas markets and portfolio expansion.
However, Saffola oils are likely to report a muted quarter, while the foods portfolio remains benign in the near term. Nuvama expects foods performance to improve gradually over the next two quarters as distribution actions and brand investments begin to gain traction.
Overall, the brokerage believes Marico’s diversified growth drivers, improving mix, and stable margins provide confidence in its medium-term earnings trajectory.
Disclaimer: The views and recommendations above are those of Nuvama. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
