On Thursday, Marico’s share price opened lower after the company’s Q1FY24 update that combined revenue declined in low-single digits every year.
During the quarter, Marico’s national business was affected by important trade destocking in Saffola edible oils in response to suddenly falling vegetable oil prices.

“The business was also affected by station inventory modifications in core portfolios generated by the last leg of trade scheme rationalisation for correction of the past Q1 revenue skew,” the company held in an exchange filing.
At 9:40 am, the Marico stock was trading at Rs 534 on the NSE, down 0.84% from the preceding close.

While topline is anticipated to dip 2-3%, analysts are reassuring management commentary on margin expansion. Marico has said its gross margin is anticipated to expand substantially in a year and sequentially.
This is because copra (dried coconut, essential for its hair oil business) prices remained favourable, edible oil prices fell sharply, while crude byproducts remained firm.

Macquarie has shown an “outperform” rating with a target price of Rs 620 a share. We upgrade earnings per share (EPS) estimations for FY24, FY25, and FY26 by 4%.

Morgan Stanley also has an “overweight” rating with a target price of Rs 611 per share. Management imagines volume pickup in Q2, which is optimistic.

For the June 2023 quarter, Marico’s domestic volumes plunged in low-single digits, with a slight volume drop in Parachute coconut oil, low double-digit volume growth in Saffola oils and a flattish quarter for value-added hair oils.
The company added that foods sustained its strong run among the fresher portfolios, while premium personal care (counting digital-first portfolio) endured steady.