Emkay Upgrades Marico to ‘Buy’, Hikes Target Price to Rs 810 on Strong Growth and Margin Outlook

Emkay Global Financial Services has upgraded Marico Ltd’s stock rating to ‘Buy’ from ‘Add’, raising its March 2026 price target to Rs 810 from Rs 700. The move comes on the back of improved “operational performance” and management’s continued focus on execution and profitability.

The brokerage firm notes that Marico’s domestic business is well-positioned to sustain double-digit revenue growth, supported by high single-digit growth in its core categories and contributions from new initiatives.

With expectations of a more favorable input cost environment in the second half of FY26, margins for the core portfolio are likely to improve. Simultaneously, the impact of losses from new businesses is expected to ease gradually, according to Emkay Global.

Also Read: Marico Q4 FY25 Results: Net Profit Up 8% to Rs 343 Crore; Declares Rs 7 Final Dividend | Republic World

“Execution continues to get stronger,” Emkay said in its latest research note. “Management’s FY25 targets have largely been achieved, and with better cost control and topline traction, earnings visibility has improved.”

Emkay has also revised Marico’s target P/E multiple to 50x—13% higher than its five-year forward average—reflecting greater confidence in the company's earnings trajectory. It pointed to the extension of CEO Saugata Gupta’s term until March 2028 as a signal of strategic continuity and sustained focus on brand building and portfolio expansion.

“Marico’s sharpened focus on youth-centric categories and its steady execution across new and existing verticals gives it an edge in the consumer space,” Emkay noted.

Q4 earnings buoyed by domestic biz

In the fourth quarter of FY25, Marico registered a 20% year-on-year rise in consolidated revenue, led by a 23% jump in its domestic business. Volume growth in India stood at approximately 7%, backed by healthy performance in the foods and premium personal care segments. However, margins came under pressure due to inflation in raw material costs and higher promotional spending.

Flagship brand Parachute posted a 22% increase in sales, largely driven by pricing actions. Value-added hair oils saw muted growth of 1% year-on-year, while edible oils grew by 26%. The company’s balance portfolio, which includes newer categories and accounts for nearly a third of total revenue, expanded by 41%, buoyed by strong volume growth.

Despite topline gains, gross margin contracted by 300 basis points due to input cost inflation, particularly in copra. Advertising and promotion (A&P) expenses rose by 125 basis points as a percentage of sales, resulting in a 265 basis point decline in operating margin to 16.8%. Adjusted profit after tax rose 8%, weighed down by a higher tax rate.

Business outlook 

To manage rising input costs, Marico implemented an 8–9% price increase in Parachute products in April 2025, adding to an approximate 30% cumulative hike. The company is now banking on a reversal in the copra cycle in the coming quarters to support volume recovery and ease cost pressures.

Management remains optimistic about growth in international markets and expects further scale-up of newer initiatives, especially as they move from modern trade to general trade, aided by Project Setu. These initiatives are expected to become margin-accretive over time.

For FY26, the FMCG major is guiding for double-digit revenue and operating profit growth. Emkay, however, anticipates that Marico will likely reclaim its FY24 margin peak by FY27, given “continued investments” and “delayed cost normalization” in the near term.