Marico fails to maintain volume growth in Q2 on poor offtake; stock down 6%

Stock tanks on flat top line in the September quarter, even as benign copra prices save the day, leading to a 16 per cent rise in pre-tax profit

In an otherwise bullish market environment, the stock of Marico fell by 6.5 per cent to Rs 366.40 on Tuesday. Disappointing volumes in September 2019 quarter (Q2) weighed on the company's top line and higher advertising spends confined earnings growth, hurting investor sentiment. After the dismal Q2 results, 9 out of 24 analysts polled by Bloomberg have downgraded the stock so far.
 
Analysts at Phillip Capital, for instance, downgraded the stock from ‘buy’ to ‘neutral’ due to growth challenges in core categories and likely higher copra prices, a key raw material, as observed in September. Marico announced its Q2