- Brokerages remain positive on Marico after recent acquisitions boosting diversification strategy
- HSBC and Jefferies maintain Buy ratings with target prices near Rs 900, implying 16-17% upside
- Acquisitions in snacking, nutrition, and skincare target growth in premium personal care and foods
Brokerages remain constructive on Marico after its recent acquisition spree, saying the moves strengthen its diversification strategy and open new growth avenues beyond its core hair oils business. HSBC, Morgan Stanley and Jefferies have all reiterated positive views on the stock, highlighting the company's sharper focus on premium personal care, foods, and digital-first brands.
HSBC and Jefferies have maintained their 'Buy' ratings with target prices of Rs 900, implying an upside of about 16-17% from the current market price of Rs 770.65. Morgan Stanley also remains constructive.
Marico recently announced three acquisitions-gourmet snacking brand 4700BC, nutrition platform Cosmix, and Vietnam-based skincare company Skinetiq-marking a strategic push into faster-growing, high-margin categories.
Brokerages believe these acquisitions address "portfolio white spaces" while positioning Marico to capture emerging consumer trends across health, wellness, and premium personal care.
Premium Personal Care to Drive Future Growth
A key highlight across brokerage reports is the rising contribution of foods and premium personal care (PPC) to Marico's revenue mix. Morgan Stanley noted that the share of these segments is expected to increase from 22% in FY24 to 33% by FY30, reflecting a meaningful shift in the company's growth engine.
The foods segment, led by brands such as 4700BC, is projected to see strong expansion, with brokerages estimating revenue growth of over 30% annually in the medium term. Meanwhile, digital-first personal care brands are expected to deliver even faster growth, supported by premiumisation and rising online penetration.
Jefferies highlighted that Marico aims to scale its newly acquired businesses to three to three-and-a-half times their current size by FY30, with improving profitability over time.
ALSO READ: Marico Acquisition Of 4700BC Popcorn Brand Wins Brokerage Approval; Investec Sees Upside
Margin Expansion and Profitability Outlook
Brokerages also see profitability improving as Marico scales its digital-first portfolio. HSBC expects EBITDA margins for digital-first premium personal care to reach double digits by FY27 and expand further into the mid-teens by FY30.
Importantly, analysts do not expect the acquisitions to dilute overall margins significantly, given their strong profitability potential and Marico's track record of successfully scaling digital brands such as Beardo and Plix.
Jefferies noted that Marico's digital personal care portfolio could generate Rs 4,000 crore in revenue by FY30, driven by premiumisation and category expansion.
Execution Key to Rerating Potential
While the strategic direction has been well received, brokerages emphasised that execution will remain critical. HSBC said Marico's ability to integrate acquisitions successfully and scale them profitably could drive valuation rerating over time.
Analysts also pointed to Marico's strong distribution network, digital capabilities, and experience in building premium brands as key enablers of future growth.
ALSO READ: Marico To Acquire 60% Stake In Cosmix Wellness For Rs 226 Crore
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