MARICO - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.7
| Stock Code | MARICO | Market Cap | 93,457 Cr. | Current Price | 721 ₹ | High / Low | 780 ₹ |
| Stock P/E | 48.2 | Book Value | 39.0 ₹ | Dividend Yield | 1.46 % | ROCE | 42.8 % |
| ROE | 36.5 % | Face Value | 1.00 ₹ | DMA 50 | 741 ₹ | DMA 200 | 716 ₹ |
| Chg in FII Hold | -0.19 % | Chg in DII Hold | 0.35 % | PAT Qtr | 441 Cr. | PAT Prev Qtr | 395 Cr. |
| RSI | 35.5 | MACD | -4.04 | Volume | 5,94,270 | Avg Vol 1Wk | 29,36,121 |
| Low price | 578 ₹ | High price | 780 ₹ | PEG Ratio | 5.10 | Debt to equity | 0.04 |
| 52w Index | 70.6 % | Qtr Profit Var | 19.5 % | EPS | 14.9 ₹ | Industry PE | 23.5 |
📊 Financials: Marico has a market cap of 93,457 Cr. with quarterly PAT at 441 Cr., up from 395 Cr. (19.5% growth). ROE at 36.5% and ROCE at 42.8% reflect excellent efficiency and profitability. Debt-to-equity ratio of 0.04 indicates an almost debt-free balance sheet. EPS stands at 14.9 ₹, supported by consistent earnings. Cash flows remain strong given its FMCG business model.
💹 Valuation: Current P/E of 48.2 is significantly higher than the industry average of 23.5, suggesting overvaluation. P/B ratio is ~18.5 (721 ₹ / 39 ₹), which is steep relative to book value. PEG ratio of 5.10 highlights overpriced growth. Intrinsic value appears lower than current market price, making the stock richly valued despite strong fundamentals.
🏭 Business Model & Competitive Advantage: Marico operates in FMCG, focusing on personal care, hair oils, and healthy foods. Its competitive advantage lies in strong brand equity, wide distribution, and leadership in niche categories like Parachute and Saffola. However, profitability is sensitive to raw material costs (copra, crude derivatives) and consumer demand cycles.
📈 Entry Zone: With RSI at 35.5 (near oversold) and support around 680–700 ₹, accumulation in this zone is favorable. Current price at 721 ₹ remains expensive relative to valuation metrics, so cautious accumulation is advised.
🕰️ Long-Term Holding Guidance: Marico is fundamentally strong with high return metrics and strong brand presence. Long-term holding is recommended, but investors should be mindful of valuation premiums and raw material cost pressures.
Positive
- Excellent ROE (36.5%) and ROCE (42.8%).
- Debt-to-equity ratio at 0.04 shows near debt-free status.
- Quarterly PAT growth of 19.5%.
- DII holdings increased by 0.35%, showing domestic investor confidence.
Limitation
- High P/E (48.2) compared to industry average (23.5).
- P/B ratio (~18.5) is steep relative to book value.
- PEG ratio of 5.10 indicates overpriced growth.
- FII holdings decreased by 0.19%, showing reduced foreign confidence.
Company Negative News
- Valuation multiples remain stretched compared to peers.
- Stock trading below DMA 50 and DMA 200, indicating weak momentum.
Company Positive News
- Quarterly PAT improved from 395 Cr. to 441 Cr.
- Strong brand equity and leadership in niche FMCG categories.
Industry
- FMCG sector benefits from steady demand and brand loyalty.
- Industry P/E at 23.5 highlights Marico’s overvaluation.
Conclusion
⚖️ Marico is a fundamentally strong FMCG company with excellent return metrics and brand dominance. Entry around 680–700 ₹ is favorable, and long-term holding is recommended, though investors should remain cautious of valuation premiums and raw material cost volatility.