Defying the market gloom, the share price of Marico climbed more than 2 percent in the morning trade on BSE on March 16.
The stock climbed after Motilal Oswal Financial Services upgraded the stock to a 'buy' with a target price of Rs 315, an upside of 21 percent.
"The stock has corrected nearly 35 percent since we downgraded it to ‘neutral’ at the end of Q2FY20 results due to the company reporting a sharp deceleration in volume growth, a trend that has well continued in Q3FY20 results as well," Motilal Oswal said.
Motilal said after the requisite price action in its largest brand, Parachute, which accounts for nearly 30 percent of sales, Marico’s overall volume growth outlook was better than that of its peers barring Hindustan Unilever and Nestle."Given the uncertain environment, we have attributed a target multiple of 35 times, close to its 10-year average; yet, we have obtained 21 percent upside on the stock. If we value the company on its five-year average, the upside could be nearly 47 percent," Motilal Oswal said.
Marico was trading 1.61 percent up at Rs 265 on BSE at 1050 hours.