Morgan Stanley has reiterated its ‘Equal-weight’ rating on Marico with a target price of ₹674, maintaining a neutral stance as the company continues to drive pricing-led growth in its core portfolio, while laying the foundation for structural expansion through new-age and premium categories.
For Q4FY25, Marico reported a net profit of ₹345 crore, up 7.8% YoY, as revenue surged 19.8% YoY to ₹2,730 crore, driven by a strong 7% volume growth in India and healthy momentum in its international operations. However, despite top-line growth, EBITDA growth was subdued at 3.6% YoY to ₹458 crore, with margins contracting to 16.8% from 19.4% a year earlier due to elevated input costs and higher advertising and promotion (A&P) spends.
Management commentary suggested that pricing actions will continue in the first half of FY26, particularly in the core portfolio, where commodity cost pressures remain uneven. MS noted that Marico remains focused on transforming its portfolio beyond traditional hair and edible oil segments.
Significantly, the company aims to scale up its food business by 25% annually, with the segment and its premium personal care verticals projected to contribute over 25% to revenues by FY27. Moreover, its digital-first brands are expected to grow 2.5x by FY27, led by names like Beardo, which is on track to achieve double-digit EBITDA margins.
Morgan Stanley believes these emerging segments will help diversify Marico’s growth levers, but adds that much of the medium-term upside may already be priced in. The brokerage awaits clearer margin recovery trends before turning more constructive on the stock.
Disclaimer: The above views are those of the brokerage and not the publication. Investors are advised to consult a certified financial advisor before making any investment decisions.
