Why are Marico shares rising for 4 sessions?

Shares of Marico, one of India's leading consumer goods companies, have maintained an uptrend for the last four sessions, rising as much as 9% during this period. This can be attributed to Marico’s deal with Kaya to expand in the personal care space as well as decent performance in June quarter of the financial year 2024-25. The FMCG company released its business update for April-June period on July 5, which showed that its consolidated revenue grew in high single digits, in line with Street expectations, amid slight improvement in demand sentiment

Cheering Q1 business update, Marico shares gained as much as 6.5% to ₹655.70 on the BSE, while its market capitalisation climbed to ₹83,875 crore. Early today, the consumer goods stock opened higher at ₹630.05, up 2.4% against the previous closing price of ₹615.30. The counter witnessed strong volume as 1.8 lakh shares changed hands over the counter in the first two hours of trade compared with the two-week average of 0.4 lakh stocks.  

The share price of Marico hit an all-time high of ₹666.85 in intraday trade on Friday, rebounding 37% from its 52-week low of ₹486.75 touched on March 19, 2024. The stock has delivered 23% returns in the last one year, while it surged nearly 24% in six months. The largecap stock has given flat return in the past one month, while it gained 6.5% in a week.

Marico released its Q1 FY25 business update post market hours on July 5, posting revenue and EBITDA growth of 8% and 11%, respectively, on a year-on-year (YoY) basis. During the quarter, the domestic business also saw a modest uptick in underlying volume growth sequentially.

“Consolidated revenue grew in high single digits, despite the residual impact of pricing cuts in the Saffola Oils portfolio and currency headwinds in overseas markets. We expect consolidated revenue growth to trend upwards during the year, on the back of an improving trajectory in domestic volume growth and higher realizations due to the favourable pricing cycle in key domestic portfolios,” Marico said in the exchange filing.

As per the company, Parachute Coconut Oil posted low single-digit volume growth in this quarter, but is likely to pickup visibly through the rest of the year given the consistently healthy trends in offtake growth. Saffola Oils delivered mid-single digit volume growth amidst marked stability in input and consumer pricing. Value Added Hair Oils had a soft start to the year due to competitive headwinds persisting in the bottom of the pyramid segment, while the mid and premium segments fared relatively better.

“We expect the portfolio to revert to growth from the next quarter. Foods and Digital-first brands sustained their robust momentum and scaled up well ahead of stated aspirations,” the release notes.

Earlier this month, the company announced that it will collaborate with renowned dermatological solutions provider, Kaya Limited, to advance its play in science-backed personal care. Under this arrangement, it will have exclusive rights to scale up Kaya’s range of efficacy-based personal care products outside of its clinics. This key strategic initiative will be an additional growth driver for Marico’s Premium Personal Care led Digital Business and further accelerate the portfolio diversification agenda of the India business, the release says.

The board of Marico is set to meet on August 5 to consider and approve financial results of the company for the first quarter ended June 30, 2024.

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