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TiEcon Mumbai 2025 concluded successfully, emphasizing the 'Dhanda First' philosophy, which prioritizes business fundamentals and ethical entrepreneurship. Key speakers highlighted India's potential for tech giants, the need for substantial early-stage funding, and the importance of compassionate capitalism in fostering sustainable growth. The summit showcased insights on AI, quick commerce, and the critical role of Mumbai in driving innovation and economic expansion.
Marico anticipates that urban consumption will take at least six months to recover, as food inflation reaches a 15-month high of 10.87%. The company's CEO, Saugata Gupta, noted that while the sector faces challenges, a recovery is expected once food inflation stabilizes.
Marico Limited reported a 7.6% YoY revenue increase to Rs. 2,664cr in Q2FY25, driven by a 5% volume growth in its domestic business and a 13% rise in international revenue. Despite a 20.3% increase in profit after tax to Rs. 433cr, margins were pressured by rising input costs. The company anticipates double-digit revenue growth in H2FY25 but faces challenges from higher costs and uncertainties in its international operations, leading to a cautious rating downgrade to ACCUMULATE with a target price of Rs. 678.
Marico anticipates double-digit revenue growth in the second half of FY25, with food inflation expected to moderate in the coming quarters, boosting urban consumption. Currently, premium and food segments account for 21% of revenue, projected to rise to 30% in five years. The company has raised prices for its Saffola range due to rising raw material costs, including coffee, cocoa, and palm oil, but plans to absorb some costs to maintain volume growth and market share. Gupta also noted that crude oil prices are not expected to fluctuate significantly in the near term.
Kirana stores, once central to India's retail landscape, are struggling with profitability due to the rise of e-commerce and changing consumer habits. FMCG giants like Dabur and Hindustan Unilever are responding by streamlining inventories to support their traditional distributors, despite a temporary dip in sales. Dabur's CEO emphasized that this strategic move is essential for the long-term health of their business and the profitability of their general trade partners.
The Q2 earnings season for FY25 is underway, with major companies like Apollo Hospitals, Kansai Nerolac Paints, and Trident set to release their results. While many firms have reported, the overall corporate earnings scorecard has been weak, with only 62% meeting or exceeding profit expectations, particularly in the consumption sector. Notably, GAIL's earnings missed expectations due to lower gas trading margins, while Power Grid's profit remained flat year-on-year.
The festive spirit is dampened as the Nifty index experiences a significant drop, sliding below 24,350, with the Sensex down 450 points. Despite this decline, smallcaps outperform with a strong advance-decline ratio of 3:1 on the NSE, while FMCG emerges as the top sectoral gainer. In contrast, banks, IT, and pharma sectors face pressure.
Prabhudas Lilladher has assigned an "Accumulate" rating to Marico with a target price of Rs 693, reflecting a slight increase from Rs 681. The company's recent performance showed stable volume growth and positive pricing, although estimates for FY25-27 have been slightly reduced due to margin concerns and sluggishness in key products. Marico's innovation and diversification strategies are expected to drive sales growth of 11.2% and a PAT CAGR of 9.8% over the next three years.
Indian equity markets extended gains, rising half a percent but remained below the crucial 100-day EMA of 24,475. The rally was primarily driven by banks, with experts noting that a decisive close above 24,500 is essential for further upward movement. Key stocks to watch include Marico and Torrent Pharma, while L&T and Dabur are set to report Q2 earnings today.
Marico's Q2 results have generated optimism among brokerages, with Nomura issuing a 'buy' recommendation and a target price of Rs 760, citing resilience in the premium and mass-market segments. The company implemented a 10% price hike for Parachute and 15% for Saffola Oils, leading to volume growth and market share gains, while its food, premium personal care, and digital brands also demonstrated strong growth.
Marico Limited
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