Large cap Consumer Goods Stock Gets "Buy" Call, Sharekhan Sees 30% Upside Potential

Leading brokerage firm Sharekhan in its recent equity report on Marico Ltd, a large-cap Consumer Goods sector stock, has assigned a "Buy" on the stock. The brokerage has estimated a target price of Rs 645 apiece to the stock, sees gains up to 30% if purchased the stock at its current market price. It has a market capitalisation of Rs 64,586.32 crore. Below are key takeaways from the report.

Marico's Stock Current Market Price, 52-Week Low/High, & Returns

The stock of Marico on NSE last traded at Rs 499.50 apiece. The stock recorded its 52 week high on 23 September 2022 at Rs 554.35 apiece and 52 week low on 28 March 2022 at Rs 468.50 apiece, respectively.

The stock surged 0.14% in 1 week and 1.13% in 1 month, respectively. It has fallen 2.26% in 1 year. However, it has given a positive return of 68.69% in 3 years and 60.02% in 5 years, respectively.

Maintain Buy with unchanged PT of Rs. 645

According to the brokerage firm, Marico's stock price has underperformed the broader indices and is trading at attractive valuations of 38x/34x its FY2024E/FY2025E EPS, which is at a discount to its five-year average multiple of 42x. Softening of key input prices and price correction in the core portfolio will lead to consistent earnings growth in the coming quarters. "Market share gains in the core domestic portfolio, scaling up of foods business, and improving growth prospects in international markets such as Bangladesh and Vietnam are some of the key catalysts for double-digit earnings growth over the next two to three years (expect 15% earnings CAGR over FY2022-FY2025E). Hence, in the backdrop of an uncertain demand environment, we prefer Marico in view of good earnings visibility in the near to medium term vs. peers and discounted valuations. We maintain our Buy rating on the stock with an unchanged price target (PT) of Rs. 645," Sharekhan said.

According to Sharekhan, the key risks to the call would be, "Any sudden spike in key input prices or political/macro uncertainties in key international markets would act as a key risk to our earnings estimates."

Disclaimer

The stock has been picked from the brokerage report of Sharekhan. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.