Marico Q4 Results Review: Inline; Near Term Ebitda Pressure Likely; Nirmal Bang Maintains 'Hold'

Marico’s domestic revenue increased 23% YoY, along with growth in volumes by 7% YoY (marginally lower vs our estimate of 8%). International sales grew 10.7% YoY (16% YoY in constant currency terms). Consolidated revenue increased 19.8% YoY to Rs 27.3 billion, in line with our estimate of Rs 26.9 billion. Consolidated gross margin came in at 48.6% (lower than our est. of 49.8%; down by 300 bps YoY and 90 bps QoQ), mainly impacted by the rising trend in copra and vegetable oil prices, which was only partly offset by pricing interventions in key portfolios.

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Nirmal Bang Report

While Marico Ltd. reported largely in line set of numbers across all key line items in its Q4 FY25 results, the sharp 48% YoY increase in copra prices is likely to dent operating margins in H1 FY26. Thus, while the management is targeting double digit sales growth in FY26 and aspiring for double digit profitability growth as well, achieving the latter could be challenging, in our view.

Growth businesses (foods and premium personal care) are largely on track on sales growth expectations and profitability.

We expect EPS CAGR of 12.7% over FY25-FY27E, broadly in line with the EPS CAGR of ~11% over 10 years. Valuing the company at 45 times FY27E EPS (in line with the 10-year average multiple), we get a marginal upside of ~3% to the current market price. We maintain Hold rating as we await a better entry point.

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