Marico, a Mumbai-based Fast-Moving Consumer Goods (FMCG) company, witnessed a fall in its share price on the Bombay Stock Exchange (BSE), despite reporting a robust operational performance for the second quarter of the fiscal year. The decline in share price followed JPMorgan's decision to reduce its price target for Marico by 5%, prompted by concerns over a steady decline in domestic business revenue.
On Tuesday, Marico shares on BSE dropped by ₹7.1 to ₹525, a 3.4% decrease, reflecting the company's decline in domestic sales. This occurred even as JPMorgan maintained an 'Overweight' rating for the company.
Despite the drop in sales, Marico reported a significant net profit rise of 17.3% year-on-year to ₹353 crore ($47 million) for Q2, surpassing analyst expectations. However, the company's Q2 revenue fell by 1% to ₹2,476 crore ($330 million), attributed to the decrease in domestic sales.
In contrast to its declining revenue, Marico's margin improved by 280 basis points to reach 20.1%, indicating a positive shift amidst these challenges. The margin improvement highlights the company's ability to maintain profitability despite facing revenue pressures.
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