Marico shares gained 10% in June, up over 31% in less than 3 months. Good time to buy?

livemint.com:

Marico, one of India’s leading consumer products companies in the hair and wellness market, have shown a strong upward trend since April, rebounding from a steady decline between September 2023 and March 2024.In April, the stock made a robust comeback, ending the month with a 4.18% gain and extending its rally into May with an additional 15% increase. So far this month, shares are up nearly 10%, resulting in a cumulative gain of 31.60% in less than three months, trading at ₹654.60 apiece.

In a recent note, domestic brokerage firm Sharekhan retained its 'buy' rating on Marico with a revised target price of ₹775 per share, citing the growth pick up the rural segment. The firm highlighted that better growth visibility in the core portfolio, coupled with a focus on premiumisation, will drive consistent earnings growth ahead.Also Read: Brokerages see likely gain in FMCG stock with BJP’s return to powerMarico’s domestic volume growth marginally improved from 2% in Q3 FY2024 to 3% in Q4 FY2024.

The underperformance of the VAHO portfolio and muted growth in Parachute rigid packs continued to impact volume growth in the past few quarters. However, a recovery in rural consumption, led by the expectation of a better monsoon and incentives from the government for the rural economy, will drive the growth of mass consumption in those regions.

This should help the VAHO portfolio have a good share in the Hindi heartland (especially at the bottom of the pyramid) to see a good pick-up in demand in the coming quarters, the brokerage stated. On the other hand, Parachute will see an improvement in volume growth to the mid-single digit as rising copra prices will impact the sentiments of regional and loose players in the near term.