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On Tuesday, Marico Ltd (MRCO:LN) shares experienced a positive adjustment by Goldman Sachs. The firm increased the price target to INR715 from INR660 while maintaining a Buy rating on the stock. The adjustment follows Marico's recent performance update, which showed a 4% year-over-year improvement in domestic volume growth.
The company's growth comes despite a strategic reduction in distributor inventory, an initiative aimed at enhancing distributor returns. This move, although potentially disruptive in the short term, has not hindered Marico's overall volume progression.
Notably, Marico's flagship products, Parachute and Saffola, reported growth, with Parachute volumes up 2% year-over-year and Saffola achieving mid-single-digit growth.
Goldman Sachs' maintained Buy rating reflects confidence in Marico's strategy and its execution. The firm's analysis suggests that Marico's management is correct in expecting the volume growth improvement trajectory to continue in the upcoming quarters. This projection is based on the company's current performance and market activities.
Marico's strategic initiatives to streamline distribution and focus on core product growth appear to be paying off, as evidenced by the volume increase.
Management's positive outlook, coupled with Goldman Sachs' revised price target, signals a robust performance potential for Marico in the near future.
Investors and market watchers will likely monitor Marico's progress closely. The company continues to navigate market challenges while striving to deliver improved returns and sustain its growth trajectory.
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