Marico Share Price Drops Over 4% Amid Bangladesh Crisis: Should You Buy the FMCG Stock?
Marico share priceMarico Ltd., a leading FMCG company, experienced a significant share price drop of over 4% due to the political crisis in Bangladesh. This situation has raised concerns among investors about the stability of Marico’s operations in one of its crucial markets. Here’s a detailed analysis of the factors affecting Marico’s stock, its recent performance, future prospects, and expert opinions to help you decide whether to invest in the company.
Impact of Bangladesh Crisis on Marico Marico share price
Bangladesh is a key market for Marico, contributing approximately 11-12% of the company’s revenue. The political unrest in Bangladesh poses a threat to Marico’s operations, potentially disrupting its supply chain, sales, and overall market performance in the region【6†source】【7†source】. The crisis has caused investor anxiety, leading to a significant drop in Marico’s share price.
Recent Financial Performance Marico share price
Despite the turmoil in Bangladesh, Marico’s financial performance in the first quarter of FY25 has been robust. The company reported an 8.66% increase in net profit, reaching ₹464 crore, compared to ₹427 crore in the same quarter of the previous year. Additionally, Marico’s revenue grew by 6.7% to ₹2,643 crore from ₹2,477 crore year-on-year (YoY). The company’s India revenues also saw a 7.38% YoY increase to ₹1,926 crore【7†source】.
Growth Prospects and Strategic Initiatives Marico share price
Marico has outlined ambitious growth plans for the medium term, aiming for double-digit revenue growth and constant currency growth in its international business. The company also expects its operating margin to improve over the next few years, driven by leverage benefits and the premiumization of its product portfolio across both the Indian and international markets【7†source】.
Analyst Recommendations Marico share price
Analysts have varied opinions on Marico’s stock, reflecting both optimism and caution:
- Emkay Global Financial Services: The firm has raised its target multiple to 47x from 42x, now at a 10% premium to Marico’s historical average forward P/E, citing better execution in the domestic market. They forecast a 10% topline and 12% earnings CAGR over FY24-27E but retained a ‘Reduce’ rating on the stock with a target price of ₹700 per share from ₹630 earlier【7†source】.
- Antique Stock Broking: This brokerage firm increased its target multiple to 50x PER from 45x, based on improved performance and management initiatives. They expect sales and earnings CAGR of 12% and 15% over FY24-27E and maintained a ‘Buy’ recommendation, raising the target price to ₹801 per share from ₹721 earlier【7†source】.
- Nuvama Institutional Equities: The firm raised its FY26E EPS estimates by 4% and target PE to 45x from 40x, retaining a ‘Buy’ call on Marico shares. The target price was hiked to ₹780 per share from ₹640 earlier, highlighting Marico’s market share gains and pricing power in its key franchise【7†source】.
- Motilal Oswal: The firm believes that Marico’s rich valuation will sustain given the earnings acceleration. It values Marico stock based on 50x June 2026 EPS estimates, arriving at a target price of ₹750 per share and reiterating a ‘Buy’ rating on the stock【7†source】.
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Risks and Considerations Marico share price
While Marico’s financial performance and growth prospects appear promising, the political instability in Bangladesh remains a significant risk. If the situation in Bangladesh deteriorates further, it could have a more severe impact on Marico’s revenue and overall business operations in the region. Additionally, any adverse macroeconomic factors or disruptions in other key markets could also affect Marico’s performance.
Should You Buy Marico Stock? Marico share price
Deciding whether to invest in Marico requires a careful evaluation of both the potential risks and rewards. Here are some key points to consider:
- Long-Term Growth Potential: Marico’s strong domestic performance, strategic initiatives for premiumization, and growth in international markets indicate a positive long-term outlook. The company’s focus on improving profitability and expanding its premium product segments could drive future growth.
- Valuation and Target Prices: Despite the recent price drop, many analysts maintain a ‘Buy’ recommendation with target prices ranging from ₹700 to ₹801 per share, suggesting potential upside. However, it’s important to consider the rich valuation and whether it aligns with your investment strategy.
- Risk Tolerance: The political crisis in Bangladesh and other potential macroeconomic risks could cause short-term volatility. If you have a higher risk tolerance and a long-term investment horizon, you might view the current price drop as a buying opportunity.
- Expert Advice: Consulting with a financial advisor or conducting further research can help you make a more informed decision based on your individual investment goals and risk appetite.
Conclusion Marico share price
Marico’s share price drop due to the Bangladesh crisis reflects the inherent risks of geopolitical instability. However, the company’s solid financial performance, strategic growth initiatives, and favorable analyst recommendations suggest potential for long-term growth. Carefully weighing the risks and rewards, along with seeking expert advice, can help you determine whether investing in Marico aligns with your financial objectives.
