BackMarico share price hits 52-week high as ICICI Securities upgrades stock, sees 19% upside
Marico share price jumps nearly 6% as ICICI Securities upgrades stock to 'buy' with a target price of ₹670.
PremiumMarico share price jumped nearly 6% to touch 52-week on Tuesday's trading session after domestic brokerage ICICI Securities upgraded Marico stock with a 'buy' rating from a 'add' rating and saw a possible upside 19% from Friday's close price of ₹562. Marico share price today opened at ₹570.05 on BSE, and touched an intraday high of ₹595, and low of ₹567.30. At 12:22 IST, Marico shares were trading over 3% higher at ₹580.65 apiece.
ICICI Securites has also revised Marico share price target to ₹670 from ₹610, up 9.9%. In its analysis, the brokerage stated the following views after meeting with Saugata Gupta, MD & CEO of Marico. The main points from the conversation were that Marico aims for medium-term volume growth of roughly 8% (as compared to revenue growth of 8% in FY2013-2023).
The brokerage stated that it valued the company's driveto expand more quickly while maintaining its current market share. The brokerage projected that volume growth for Parachute Coconut Oil (PCNO) would be aided by stable copra prices and a recovery in rural consumption.
Also Read: Marico Q1 Results: Consolidated PAT up 15% to ₹436 crore, revenue slips 3%
The brokerage said that the level of competition in the value-added hair oil market at the bottom of the pyramid (BOP) has stabilised. While Saffola anticipates holding the threshold margin while maintaining stable growth in edible oil, this, together with incremental premiumisation efforts, may assist value growth in value-added hair oil (VAHO) steadily increase.
According to the brokerage, over the medium future, revenue from the food segment is anticipated to surpass that of the edible oil industry. With less susceptibility to cyclical commodity prices, operating margin volatility may be decreased. For D2C companies, this would mean a greater emphasis on scaling up profitably by leveraging distribution and marketing resources.
“We maintain our earnings estimates for FY24-25E, modelling revenue / EBITDA / PAT CAGR of 9 / 16 / 16 (%) over FY23-25E. We upgrade to BUY (from ADD) with a revised DCF-based target price of INR 670 (vs previous TP of INR 610). At our target price, the stock will trade at 49x P/E multiple Mar’25E. Key downside risk: Higher-than-expected inflation in copra prices," said ICICI Securities in its report.
On the technical front, as per trendlyne data, Marico stock price rose 7.88% and outperformed its sector by 1.91% in the past year.
According to Rajesh Bhosale - Equity Technical and Derivative Analyst, Angel One, over the past few days, the Marico stock price has exhibited significant price fluctuations, and today's trading session has also witnessed heightened trading volume following an upward price gap at the opening.
“The current price level encounters resistance at approximately 595. If the stock can maintain trading above this level or close higher, it may pave the way for further upward movement in the short term, with an initial target of 625. Furthermore, it's worth noting that today's trading has created a bullish gap around 565, which now serves as an immediate support level," advised Bhosale.
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