HDFC Securities has upgraded Marico to 'Buy' with target price of Rs 385 in its report.

Marico’s 3QFY15 revenue grew 21% YoY to Rs 14.5bn, aided by the significant price hikes taken across the product portfolio to offset part of the RM inflation (copra up 34% YoY). Volumes disappointed with a mere 2% YoY growth (vs 1QFY15 : 7%).

Commenting on the investment rationale, the stock broker said, ''As witnessed historically, higher copra prices will likely reduce the competitive pressure on Parachute. Also, company gained market share in more than 80% of its portfolio. Marico aspires to double revenues over the next four years (18% CAGR). With urban sales contributing 70% of total domestic sales, the imminent urban revival will considerably benefit the company. Also, Marico is the cheapest stock in the FMCG space (ex-ITC). We upgrade Marico to Buy with a TP of Rs 385.''

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