MARICO - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:15 pm

Fundamental Rating: 3.4

• 📈 Revenue Growth: Quarterly PAT declined from ₹777 Cr to ₹399 Cr (-24.6%), showing earnings pressure
• 💰 Profit Margins: Strong efficiency with ROE at 36.5% and ROCE at 42.8%
• ⚖️ Debt Ratio: Debt-to-equity at 0.04, almost debt-free
• 💵 Cash Flows: EPS of ₹14.5, steady but modest relative to valuation
• 📊 ROE/ROCE: Excellent efficiency, well above industry benchmarks
• 📉 Valuation: P/E 51.0 vs Industry PE 26.3, significantly overvalued
• 📚 Book Value: ₹39.0, P/B ~18.9, premium valuation
• 📈 PEG Ratio: 5.40, indicates stretched valuation relative to growth
• 🏢 Business Model: FMCG company with strong brands in hair care, edible oils, and wellness products
• 🛡️ Competitive Advantage: Market leadership in Parachute, Saffola, and other consumer staples; strong distribution network

Positive

• ✅ High ROE (36.5%) and ROCE (42.8%) indicate strong efficiency
• ✅ Debt-to-equity ratio at 0.04, nearly debt-free
• ✅ Strong brand portfolio with leadership in FMCG categories
• ✅ FII holdings increased (+0.59%)

Limitation

• ⚠️ Quarterly PAT dropped significantly (-24.6%)
• ⚠️ High P/E (51.0) compared to industry average (26.3)
• ⚠️ PEG ratio at 5.40 indicates poor growth relative to valuation
• ⚠️ DII holdings reduced (-0.73%)

Company Negative News

• 📉 Profit decline in latest quarter
• 📉 Valuation stretched with high P/E and P/B multiples

Company Positive News

• 🌍 Expansion in wellness and premium product categories
• 💡 Strong brand equity in Parachute and Saffola
• 📈 Institutional investor confidence with FII inflows

Industry

• 💹 Industry PE at 26.3, Marico trades at a premium
• 📈 FMCG sector benefits from steady demand and premiumization trends

Conclusion

Marico shows strong operational efficiency with high ROE/ROCE and a debt-free balance sheet. However, valuations are stretched with high P/E, P/B, and PEG ratios, while profits have declined recently. Entry zone is attractive only near ₹690–710 (close to DMA 200 support). Long-term holding is favorable if earnings growth resumes and premium FMCG demand continues, but caution is advised due to valuation risks.

Would you like me to extend this into a peer benchmarking overlay comparing Marico with Dabur, HUL, and Emami, or should we run a sector rotation scan to identify compounding opportunities across FMCG and consumer wellness plays?