Fast moving consumer goods (FMCG) company Marico has raised its growth ambitions for FY27 and brought forward its Rs 20,000-crore revenue target by a year, leading analysts to turn more constructive on the consumer goods maker's earnings outlook.
The brokerages broadly expect double-digit volume growth in India and EBITDA growth in the mid-20s, aided by strong Parachute momentum, premiumisation and easing copra costs.
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The upgraded outlook, analysts believe, is the key takeaway from the September quarter results.
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Citi, Jefferies, JPMorgan and Goldman Sachs have retained positive ratings on the stock, while Jefferies and JPMorgan have raised their target prices. UBS remains ‘Neutral', arguing that the improved earnings outlook is largely priced in and that a reversal in the copra cost cycle could limit further valuation upside.
Marico Revises Guidance
Marico has revised its FY27 revenue growth guidance to the teens and EBITDA growth guidance to the mid-20s, from its earlier double-digit and high-teens outlook, respectively. It has also raised its India volume growth expectation to double digits from high single digits.
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The company now aims to achieve revenue of Rs 20,000 crore by FY29, a year ahead of its earlier plan.
Brokerages See Stronger Growth, But UBS Flags Valuation Risks
The guidance upgrade has strengthened the bullish case among several brokerages. Jefferies raised its target price to Rs 1,035 from Rs 1,000, while JPMorgan increased its target to Rs 940 from Rs 915. Both retained their positive ratings.
Citi maintained its Buy rating with a target price of Rs 1,000, highlighting the improved FY27 EBITDA growth outlook and the potential of Project SETU 2.0 to strengthen distribution through AI-led initiatives, premium portfolios and digital-first brands. Goldman Sachs also retained its Buy rating with a target of Rs 950.
UBS, however, maintained its Neutral rating with a target price of Rs 930. While acknowledging the improved guidance, it said the strong earnings outlook was largely priced in. It also flagged the possibility of a reversal in the copra cost cycle as a constraint on valuation upside.
Across the brokerage reports, Parachute's volume momentum, premiumisation and the expansion of digital-first brands remain key drivers of the medium-term outlook.
Jefferies also identified Parachute shampoo and almond oils as emerging growth engines, estimating their medium-term revenue potential at Rs 400-500 crore. Project SETU 2.0 is expected to support distribution expansion and improve execution across the portfolio.
Parachute Leads As Premium And Digital Portfolios Expand
Parachute recorded volume growth of 13% year-on-year (YoY), its strongest performance in 22 quarters. Value-added hair oils grew 21%, marking the sixth consecutive quarter of strong growth.
Marico's foods portfolio grew 45%, taking its annual recurring revenue (ARR) beyond Rs 1,500 crore. Its premium personal care portfolio crossed Rs 500 crore in ARR, while the digital-first portfolio reached Rs 1,150 crore.
Saffola Edible Oils' premium portfolio also outperformed, led by cold-pressed oils. Within Saffola Foods, Oats, Muesli and Soya Chunks supported early-teens growth.
These businesses are important to Marico's strategy of expanding beyond its established brands and improving its premium product mix. The Rs 20,000-crore revenue ambition by FY29 reflects the company's confidence in sustaining growth across these categories.
Marico Q2 Results: Profit Rises 31%, EBITDA Jumps 27%
Marico reported a 31% YoY increase in net profit to Rs 550 crore in the September quarter, compared with Rs 420 crore a year ago. Revenue rose 13% to Rs 3,897 crore, while EBITDA increased 26.6% to Rs 709 crore.
The EBITDA margin expanded to 18.2% from 16.2% in the year-ago quarter, reflecting stronger operating performance and support from lower copra costs.
The next test is whether Marico can translate its upgraded guidance into sustained volume-led growth while maintaining margins. Meanwhile, the brokerages largely see the ingredients in place, but UBS's caution underlines that the improved outlook and the stock's valuation will need to be assessed together.
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