Muted Q1 may cap upsides in Marico stock as leading brands underperform

Volumes for consumer major's India business below estimates

The stock of consumer major Marico has been a major underperformer in June, registering a fall of 18 per cent. While its peer index, the S&P BSE Fast Moving Consumer Goods, was down about 3 per cent, the BSE 100 was down 6 per cent over the same period. Near-term margin worries, increased competitive pressures, and higher valuations have weighed on the stock.

While the stock has recovered somewhat this month, the underperformance for the owner of Parachute and Saffola brands could persist since the June quarter operational performance for the India market was below expectations.

There was a mid-single digit (about