Home / Markets / Stock Markets /  Multibagger stock turns 1 lakh to 3.85 Cr by giving 1 bonus share: Buy?

With a market worth of Rs. 70,167.91 Cr, Marico Ltd. is a large-cap company that operates in the fast-moving consumer goods (FMCG) industry. Through its portfolio of brands, including Parachute, Saffola, Saffola FITTIFY Gourmet, Saffola ImmuniVeda, Saffola Mealmaker, Hair & Care, Parachute Advansed, Nihar Naturals, Mediker, Coco Soul, Revive, Set Wet, Livon and Beardo, and Just Herbs, Marico is one of India's foremost consumer products companies. The international consumer products range includes brands like Parachute, Parachute Advansed, HairCode, Fiancée, Caivil, Hercules, Black Chic, Code 10, Ingwe, X-Men, Mediker SafeLife, Thuan Phat, and Isoplus. With its headquarters in Mumbai, the company has operations in more than 25 developing nations in Asia and Africa. Seven plants managed by the firm are situated in India at Puducherry, Perundurai, Jalgaon, Guwahati, Baddi, and Sanand. By issuing only one bonus share, Marico Ltd. stock is one of the multibagger stocks that has made investors go from being lakhpati to crorepati.

Share price history of Marico Ltd

On Friday, Marico Ltd. shares ended trading on the NSE at Rs. 542.05 a piece, a fall of 1.35% from the previous close of Rs. 549.45. Compared to the 20-Day average volume of 1,439,506 shares, the stock's total volume of trades on Friday was 1,834,851 shares. The stock has dropped 1.00% over the past year, but on a year-to-date basis, it has gained 5.44% so far in 2022. On the NSE, the stock had touched a 52-week-high of 607.70 on (18-October-2021) and a 52-week-low of 455.65 on (27-January-2022) indicating that at the current market price the stock is trading 10.80% below the high and 18.96% above the low. The firm reported a promoter shareholding of 59.48%, FIIs holding of 25.16%, DIIs holding of 8.67%, Government holding of 0.09%, and public shareholding of 6.49% for the quarter that ended in June 2022.

From 2.81 on July 6th, 2001, to the current market price, the stock price has climbed immensely, logging a multibagger return and an all-time high of 19,190.04%. In the initial time, if an investor had decided to invest 1 lakh then he/she had got a total sum of 35,587 shares of this company. Many years after this, in the year 2015 date 22nd of December the company declared the bonus shares in the ratio of 1:1 which is a good sign for smart investors. After this event, the share count of the investor went to 71,174 from the initial shareholding. Hence, the overall value of the shares following the bonus issuance at the current market price is more than Rs. 3.85 Crore.

Q1FY23 results of Marico

The company's profit after tax (PAT) grew by 4% year over year to 371 Cr in Q1FY23 from 356 Cr in Q1FY22. The company reported a profit before tax (PBT) of 499 Cr in Q1FY23, higher than 467 Cr in Q1FY22, or a YoY growth of 7%. The company said that EBITDA climbed by 10% YoY to 528 Cr in Q1FY23 from 481 Cr in Q1FY22 and that EBITDA Margin jumped by 159 bps to 20.6 Percent from 19.0 Percent. In Q1FY23, the company's sales revenue grew by 1% YoY to 2,558 Cr from 2,525 Cr in Q1FY22.

Should you buy the shares of Marico?

The research analysts of the broking firm ICICI Securities have set a target price of 610 for Marico from a buying range of 540-547, with a stop loss recommendation of 500. The analysts have set a target frame of 3 months for the stock to hit the target price.

They have said in a research note that “In the recent Nifty consolidation, midcap and small cap stocks are witnessing a catch up exercise. We believe the Nifty may continue its consolidation for some time after the sharp up move seen in the last couple of months. However, a fresh up move is likely to be seen in FMCG stocks where apart from sectoral heavyweights, select midcap stocks are likely to perform in the coming sessions. Stocks like Marico, which has been witnessing delivery based buying interest, is likely to resume its positive momentum on the back of fresh positions in the futures segment."

“Leveraged positions in the stock have declined noticeably in the last couple of months as the stock witnesses a short covering trend. The current open interest in the stock is one of the lowest seen in six months below 1 crore shares while the stock has shown an inclination of up move with long accumulation whenever open interest moved to below 1 crore. We have seen initial signs of fresh long additions in the stock, suggesting further upsides on the back of fresh accumulation. The stock has seen continuous buying support near 505-510 levels. It has been trading above these levels for almost last three series. At the same time, with continued Put writing at 500 and 520 strikes, we expect downside risk to be limited. Further, Call OI of 540 strike is already witnessing closure in the September series suggesting positive bias in the stock. These positions are expected to aid it in breaking the option range on the higher side," they further added.

The research analysts have claimed that “The stock has seen one of the notable delivery based action around 510 in the last week. Since then, it has been crawling northwards with early signs of the stock making a base at the support area. Since July 2022 to till now, the stock has witnessed a time base consolidation between the range of 510 and 550. Currently, all the data points indicate that the stock is well placed to cross the hurdle levels of 550 and may witness breakout from the current consolidation."

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

 

ABOUT THE AUTHOR

Vipul Das

Vipul Das is a Digital Business Content Producer at Livemint. He previously worked for Goodreturns.in (OneIndia News) and has over 5 years of expertise in the finance and business sector. Stocks, mutual funds, personal finance, tax, and banking are among his specialties, and he is a professional in industry research and business reporting. He received his bachelor's degree from Dr. CV Raman University and also have completed Diploma in Journalism and Mass Communication (DJMC).
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