Marico shares fell 2.36% to Rs 854.35 on Wednesday as investors engaged in profit-booking. This decline came despite brokerage Motilal Oswal maintaining a 'Buy' rating with a target price of Rs 1,050. The update follows Marico’s strong Q1 FY27 performance, which saw revenue rise by 23% and domestic volume growth hit an 11% high.
Marico shares closed lower on Wednesday, dipping 2.36% to Rs 854.35, even as analysts from Motilal Oswal maintained a bullish stance on the company. The brokerage reiterated its 'Buy' rating for the stock, setting a target price of Rs 1,050. This outlook follows the company's recent earnings report, which highlighted strong growth figures for the first quarter of the 2027 fiscal year.
Strong First Quarter Growth
For the quarter ending June 2026, Marico reported a consolidated revenue of Rs 3,957 crore, representing a 23% rise compared to the same period last year. Net profit also saw a healthy increase, climbing 25% year-on-year to reach Rs 630 crore. A key highlight was the 11% growth in domestic volumes, which the company achieved for the first time in 20 quarters. Profit margins also showed improvement, with operating profit margins reaching 20.7%, a 40 basis point expansion over the previous year.
Market Reaction and Valuation
Despite the positive results and the brokerage's Rs 1,050 target price—which is based on estimated earnings for FY28—the stock experienced a decline on August 5. The drop in share price suggests that some investors chose to book profits following the company's recent stock run-up. The brokerage firm noted that it believes the company’s current valuation is justified given its strong business performance.
Key Risks to Monitor
While the financial performance remains strong, there are several factors that could influence future results. Management has highlighted that they are closely monitoring inflationary trends, especially those affecting vegetable oil prices, which directly impact production costs. Additionally, the company is watching monsoon forecasts and the potential effects of El Niño, as these conditions are critical for rural demand. Geopolitical factors also continue to play a role in creating volatility for input costs. Investors may want to track how the company manages these cost pressures in the coming quarters to maintain its profit margins.