Marico Ltd.'s strategic move to acquire a majority stake in the premium snacking brand 4700BC has garnered positive feedback from brokerages, with the likes of Investec and Morgan Stanley labelling the move as favourable for the fast-moving consumer goods (FMCG) giant.
The commentary comes on the back of Marico's announcement that it will purchase a 93.3% stake in Zea Maize from PVR Inox. The total consideration of the deal stands at around Rs 226.83 crore.
Zea Maize, a subsidiary of PVR Inox, owns 4700 BC, which has fast become one of India's leading gourmey snacking brands - offering an assortment of different popcorn flavours. The company has also witnessed rapid growth, notably reporting a turnover of Rs 99.66 crore in FY25, up from Rs 75.29 crore in the previous year and Rs 48.47 crore in FY23.
In its latest note, Investec has maintained a 'buy' rating on Marico with an unchanged target price of Rs 833. The brokerage firm has described the move as a 'strategically coherent bolt-on' that will help the company's premium category, which has seen higher growth.
Investec believes the move can benefit disproportionately from Marico's scaled go-to-market engine, with the FMCG giant offering a superior distribution leverage, which in turn, is a core upside for 4700 BC - a brand that has been largely associated with cinema chains.
Morgan Stanley, meanwhile, has maintained an 'equal-weight' rating on Marico, with an unchanged target price of Rs 741. The firm noted that the acquisition of Zea Maize Pvt Ltd - the parent company of 4700 BC - aligns with the company's goal to expand its total addressable market in value-added foods.
Morgan Stanley further notes that the acquisition will increase the annual revenue run rate of Marico's growth segment by 6%. This is in line with Marico's broader target to raise the revenue share of its growth segments from 22% in FY25 to 25% by FY27.
Also Read: PVR Inox Is Returning To Its Core After A Popcorn Phase — And Investec Likes The Pivot
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