₹2 to ₹524: Multibagger stock turns ₹1 lac to ₹1.86 Cr in 21 years

  • Marico Ltd., an FMCG firm with a market valuation of Rs. 67,645.93 crore, is a large cap company.

Vipul Das
Updated9 Aug 2022, 05:38 PM IST
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Today's closing price for Marico Ltd shares was  <span class='webrupee'>₹</span>524.60 per share, a gain of 0.94 per cent from yesterday's finish.
Today’s closing price for Marico Ltd shares was ₹524.60 per share, a gain of 0.94 per cent from yesterday’s finish.

Marico Ltd., an FMCG firm with a market valuation of Rs. 67,645.93 crore, is a large cap company. One of the top manufacturers of consumer goods in India is Marico, which has a variety of well-known brands in its portfolio, 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 received an A+ grade from BusinessWorld and SUSTAIN LABS PARIS, placing it sixth among India's most sustainable companies.

Marico share price history

Today's closing price for Marico Ltd shares was 524.60 per share, a gain of 0.94 per cent from yesterday's finish. The stock price climbed from 2.81 on July 6th, 2001 to the level it is at now, representing a multibagger return and an all-time high of 18,569.04 per cent. If an investor had invested 1 lac in this stock 21 years ago, then it would now have turned to 1.86 Cr. The stock has gained 63.96 per cent over the past five years, but only 0.77 per cent during the past year. On a YTD basis, the stock has increased by 2.04% so far in 2022, and over the past six months, it has gained by 3.36 per cent. In the last 1 month, the stock has gained 3.34% and in the last 5 days, the stock has gained 0.18%. On the NSE the stock had touched a 52-week-high of 607.70 on 18-October-2021 and a 52-week-low 455.65 on 27-January-2022 which means that at the current market price the stock is trading 13.67% below the 52-week-high and 15.13% above the 52-week-low.

Marico Q1FY23 results

The firm recorded a profit after tax (PAT) of 371 Cr in Q1FY23 compared to 356 Cr in Q1FY22, representing a YoY rise of 4%. In Q1FY23, the firm recorded a profit before tax (PBT) of 499 Cr, up from 467 Cr in Q1FY22, representing a YoY rise of 7%. The firm reported a YoY increase of 10% in EBITDA to 528 Cr in Q1FY23 from 481 Cr in Q1FY22 and an increase of 159 bps in EBITDA Margin to 20.6 Percent from 19.0 Percent. The company's revenue from operations increased by 1% YoY to 2,558 Cr in Q1FY23 from 2,525 Cr in Q1FY22.

Marico has said in its earning statement that “Gross margin expanded 401 bps YoY, attributable mainly to benign copra prices and favorable mix impact. A&P spends grew 14% on a year-on-year basis, as the Company maintained investments towards strategic brand building of core and new franchises. EBITDA margin stood at 20.6%, up 159 bps YoY, and EBITDA was up 10% YoY. PAT was up 4% YoY, due to higher effective tax rate (ETR) after the expiration of fiscal benefits in one of the manufacturing units.”

The company has said in its earning statement that “The domestic business had a soft quarter amidst a challenging consumption environment coupled with category specific headwinds in Saffola Edible Oils. In contrast, the international business posted another stellar quarter, making it the sixth consecutive quarter of double-digit constant currency growth.”

“In India, the FMCG sector witnessed volume decline in Q1FY23 for the third quarter in a row and value growth continued to be price-led. Domestic volumes declined by 6% yoy, dragged by a double-digit decline in Saffola Oils. Ex-Saffola Oils, domestic volume growth was 1%. The inherent strength of our brands, focused execution and brand building investments translated into 96% of the portfolio gaining market share and 93% of the portfolio sustaining penetration, both on a MAT basis,” said Marico in its earning statement.

“In India, the FMCG sector witnessed volume decline in Q1FY23 for the third quarter in a row and value growth continued to be price-led. Rising retail inflation continued to exert pressure on demand as consumers appeared to exercise restraint in non-essential categories, while downtrading and downgrading in essential categories. Rural continued to underperform urban on a year-on year basis due to the accentuated impact of inflation on disposable incomes. On the other hand, premium discretionary categories fared relatively better given the lower base and lesser impact of inflation on the upper income consumer segment,” further added the company.

Saugata Gupta, MD & CEO commented, “The year began on a mixed note with the domestic business contending with persistent inflation and resultant weak demand conditions, while the international businesses posted a robust all-round performance. In India, despite the strong headwinds, we have continued to record market share and penetration gains, and deliver operating margin expansion. We expect volume trends to improve once inflation pressures ease. We are confident of maintaining the strong momentum in international markets as we singlemindedly focus on strengthening the fundamentals across each of our businesses. We will continue to weather transient headwinds with resilience and prioritize sustainable and profitable growth over the medium term.”

Should you buy the shares of Marico?

The brokerage firm Sharekhan has said in a note that “Q1FY2023 was largely in line with expectations with flat revenue (affected by the decline in domestic revenue) and strong increase in gross margins (benefited by correction in copra prices) during the quarter. Consolidated revenue grew by 1.3% y-o-y to Rs. 2,558 crore, with India business revenue down 4%, while the international business registered 18% constant currency growth. India business sales volume decreased by 6% (excluding Saffola, edible oil volume growth stood at 1%). A correction in copra prices helped gross margins improve by 401 bps y-o-y and 57 bps q-o-q to 45%. Consolidated OPM improved by 159 bps y-o-y to 20.6% and operating profit improved by 10% to Rs. 528 crore. Lower other income led to 3.3% growth in reported PAT to Rs. 377 crore.”

The research analysts of the broking firm Sharekhan said “Marico is banking on 4Ds (Diversification, Distribution, Digital, and Diversity) to drive consistent double-digit earnings growth in the medium to long term. Gaining market share in the core domestic portfolio through new launches, scaling up the foods business, and improving growth prospects in Bangladesh and Vietnam are some of the key growth levers for Marico in the near to medium term. With copra prices expected to remain benign, Marico’s profitability is expected to be better compared to its peers. The stock is currently trading at 44.0x/37.4x its FY2023/FY2024E earnings. We like the company’s focus on de-risking its business model by premiumisation of the core, expansion of foods portfolio, scaling up digital brands, and cost management. We maintain our Buy recommendation on the stock with an unchanged PT of Rs. 645.”

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

 

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First Published:9 Aug 2022, 05:38 PM IST
HomeMarketsStock Markets ₹2 to ₹524: Multibagger stock turns ₹1 lac to ₹1.86 Cr in 21 years

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