MARICO - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.9
| Stock Code | MARICO | Market Cap | 98,107 Cr. | Current Price | 756 ₹ | High / Low | 814 ₹ |
| Stock P/E | 50.6 | Book Value | 39.0 ₹ | Dividend Yield | 1.39 % | ROCE | 42.8 % |
| ROE | 36.5 % | Face Value | 1.00 ₹ | DMA 50 | 763 ₹ | DMA 200 | 731 ₹ |
| Chg in FII Hold | -0.19 % | Chg in DII Hold | 0.35 % | PAT Qtr | 441 Cr. | PAT Prev Qtr | 395 Cr. |
| RSI | 43.9 | MACD | -2.87 | Volume | 17,35,709 | Avg Vol 1Wk | 23,28,665 |
| Low price | 615 ₹ | High price | 814 ₹ | PEG Ratio | 5.36 | Debt to equity | 0.04 |
| 52w Index | 71.1 % | Qtr Profit Var | 19.5 % | EPS | 14.9 ₹ | Industry PE | 22.0 |
📊 Financial Overview
- Revenue & Profitability: PAT rose from 395 Cr. to 441 Cr. QoQ, showing steady growth. EPS at 14.9 ₹ is modest relative to valuation.
- Margins & Returns: ROE at 36.5% and ROCE at 42.8% are excellent, reflecting strong capital efficiency.
- Debt & Liquidity: Debt-to-equity ratio of 0.04 indicates negligible leverage, enhancing financial stability.
- Cash Flow: Strong profitability supports reinvestment and dividend payouts.
💹 Valuation Metrics
- P/E Ratio: 50.6 vs Industry PE of 22.0 → Overvalued.
- P/B Ratio: ~19.4 (Price 756 ₹ / Book Value 39 ₹) → Very expensive relative to assets.
- PEG Ratio: 5.36 → Indicates growth is priced at a steep premium.
- Intrinsic Value: Current price appears above fair value zone despite strong returns.
🏢 Business Model & Competitive Advantage
Marico is a leading FMCG company with strong brands in hair care, edible oils, and wellness products. Its wide distribution, brand loyalty, and innovation in health-focused categories provide a competitive edge. However, valuations are stretched relative to fundamentals.
📈 Entry Zone & Long-Term Guidance
Technically, RSI at 43.9 and negative MACD suggest mild weakness. A better entry zone would be 720–740 ₹ (near support levels). Long-term holding is advisable given strong fundamentals and brand strength, but investors should be cautious of high valuations.
✅ Positive
- Strong ROE (36.5%) and ROCE (42.8%).
- Debt-free balance sheet (D/E 0.04).
- Quarterly PAT growth (441 Cr. vs 395 Cr.).
- DII holdings increased (+0.35%), showing domestic confidence.
⚠️ Limitation
- High P/E (50.6) and P/B (~19.4) ratios.
- PEG ratio (5.36) indicates expensive growth pricing.
- Dividend yield at 1.39% offers limited income support.
📉 Company Negative News
- FII holdings decreased (-0.19%), showing reduced foreign confidence.
- Valuation significantly above industry average.
📈 Company Positive News
- Quarterly PAT improved QoQ.
- DII accumulation signals domestic support.
🏭 Industry
The FMCG industry benefits from rising consumer demand, brand loyalty, and innovation in health and wellness categories. Industry PE at 22.0 highlights Marico’s premium valuation relative to peers.
🔎 Conclusion
Marico is fundamentally strong with excellent return ratios, low debt, and steady profit growth. However, valuations are stretched, limiting immediate upside. Accumulation near 720–740 ₹ is recommended for long-term holding, contingent on sustained earnings growth and normalization of valuation multiples.