IIFL Securities Stock Idea: Buy Marico with Target Rs 712

IIFL Securities has recommended a 'buy' call on Marico, a leading FMCG company, with a target price of Rs 712. At the time of the recommendation, Marico's market price was Rs 694.45, indicating a potential upside of around 2%. The brokerage firm cited the company's strong brands, consistent growth in revenue and profits, and potential for further expansion as key reasons for their bullish outlook.

About Marico:

Marico Limited is an Indian multinational consumer products company based in Mumbai, Maharashtra. The company's products include hair care, skincare, and edible oils. Marico's portfolio of brands includes Parachute, Saffola, Hair & Care, Nihar, Livon, and Set Wet. The company operates in over 25 countries and has a strong presence in emerging markets such as India, Bangladesh, and Sri Lanka. Marico is a subsidiary of the FMCG conglomerate, Hindustan Unilever Limited.

52 Week Price Trend:

Marico, with a current market price of Rs 694.45, has witnessed a significant upward trend since its 52-week low of Rs 462.7. The stock has outperformed the market, showcasing a notable appreciation against its 52-week high of Rs 595. This positive performance indicates investors' confidence in Marico's business prospects and its ability to navigate the current market challenges. Analysts generally maintain a positive outlook for the stock, citing factors such as the company's strong brand portfolio, consistent financial performance, and expansion plans in international markets as key drivers of its growth potential.

Stratzy's MOST Analysis:

Marico's AAA rating from Stratzy's MOST framework indicates strong fundamentals across all four pillars: Management, Outlook, Safety, and Trend. The company's sound management practices, positive outlook for growth, financial stability, and favorable industry trends contribute to its low fundamental risk rating. This AAA rating suggests that Marico is a well-managed organization with a strong competitive position, providing investors with confidence in its long-term performance.

Company's Fundamentals:

Marico (NSE: MARICO) is an India-based FMCG company with a wide portfolio of brands in the hair care, skin care, and edible oils segments. The company's financial ratios indicate its valuation and income-generating capacity. The Stock PE of 46.43 implies that investors are willing to pay ₹46.43 for every ₹1 of earnings, indicating a relatively high valuation compared to its peers. The PB Ratio of 16.13 suggests that investors are paying ₹16.13 for every ₹1 of book value, which is also considered higher than the industry average. However, Marico's Dividend Yield of 0.86% provides investors with a regular stream of income, making it attractive for dividend-seeking investors.

Fundamental and Technical information provided in this blog were last updated on 14 Sep, 2024

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