Marico is in focus after Motilal Oswal reiterated a ‘Buy’ rating on the stock with a target price of Rs 900, implying an upside of about 22% from current levels. The brokerage is positive on Marico’s core business stability and the growth in its newer segments, like foods and digital brands.
Marico: Core business remains resilient
According to Motilal Oswal, the India business delivered high single-digit volume growth and around 30% value growth in the first nine months of FY26.
The international business, which contributes roughly a quarter of total revenue, grew about 18% during the same period. Low exposure to the MENA region, which contributes less than 5% of revenue, has further limited geopolitical risks, the report explained.
Marico: Shift beyond legacy categories
The brokerage firm also highlighted that Marico is steadily transitioning away from its traditional dependence on coconut oil and edible oils toward faster-growing segments such as foods and premium personal care.
The company is targeting a 20–25% CAGR in these newer segments, with management aiming to increase their contribution to about 33% of domestic revenue, up from roughly 25% currently.
Marico: Lower raw material volatility offer cushion
At a time when geopolitical tensions are pushing up costs for most FMCG companies, Marico appears relatively insulated, Motilal Oswal said. Around 50% of its raw material basket is copra, which has seen prices correct nearly 40% from peak levels, the report noted.
In comparison, crude derivatives and packaging account for only about 18–20% of raw materials. This positions Marico among the few FMCG players expected to see margin expansion in FY27, with management guiding for a 150–200 basis point improvement, the report said.
Foods business scaling up
Revenues from the food segment have already scaled significantly, crossing Rs 900 crore in FY25, and are expected to expand further to nearly 15 times FY20 levels by FY30, the report noted.
Growth is being driven by brands such as Saffola Oats and True Elements, along with newer additions like 4700BC and Cosmix, the report said. These acquired brands are expected to scale 3–3.5 times by FY30, according to the brokerage firm.
The report noted that operational improvements, including supply chain efficiencies and go-to-market refinements, have already led to significant margin expansion in the segment.
Digital brands gather momentum
Marico’s digital-first portfolio, which includes brands such as Beardo and Plix, continues to scale rapidly. Beardo has grown around five times between FY21 and FY26, while Plix has expanded about six times since FY24, as per the report.
These brands are also improving profitability, with the digital-first personal care segment expected to deliver double-digit EBITDA margins by FY27 and improve further over time.
Margins and profitability outlook
Marico’s margins were impacted in FY26 due to elevated copra prices, but the outlook is improving. With input costs easing and a higher share of premium products, EBITDA margins are expected to recover to about 18.8% in FY27 and 19.1% in FY28, as per the report.
Motilal Oswal expects the company to deliver a revenue, EBITDA and adjusted profit CAGR of about 12%, 18% and 16%, respectively, over FY26–28.
Distribution and acquisitions add to growth
Marico is also expanding its distribution reach through Project SETU, and acquisitions such as 4700BC, Cosmix and Candid are expected to contribute around 5% of total revenue by FY30.
Motilal Oswal values the stock at 50 times FY28 earnings, maintaining its ‘Buy’ rating.
