MARICO - Marico

📊 NSE: MARICO 🏢 Solvent Extraction 📅 Last Updated: 12/14/2025 9:37

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 31% YoY in Q2 FY26, the highest in 17 quarters. India business delivered 7% volume growth in Q2 FY26. International business delivered 20% constant currency growth (CCG) in Q2 FY26, with Bangladesh showing high single-digit CCG in Q2 FY25 and double-digit CCG in Q3/Q4 FY25.

Geographic Revenue Split

International business contributes 23-25% of total revenue. India business accounts for the remaining 75-77%. Key international markets include Bangladesh, Middle East, North Africa, Southeast Asia, and South Africa.

Profitability Margins

Gross margins are expected to improve from a bottomed-out position. PAT margin was 13.19% in FY22. PBDIT margins stood at 16.1% in Q2 FY26, down from 19.6% in Q2 FY25 due to a sharp rise in material costs which reached 57.4% of revenues in Q2 FY26 compared to 49.2% in Q2 FY25.

EBITDA Margin

EBITDA margin was 19.7% in fiscal 2025. In Q2 FY26, EBITDA grew 7% on a like-for-like basis. Operating margins are expected to improve by at least 200 basis points in the next fiscal year as inflationary pressures on raw materials like Copra abate.

Capital Expenditure

Marico maintains a cash surplus of over INR 2,150 crore as of March 2025. Surplus cash is utilized for enhancing in-house capacities and supporting new product launches. Specific INR values for annual capex are not disclosed, but net cash generation is healthy at INR 300-400 crore annually.

Credit Rating & Borrowing

The company maintains a healthy financial risk profile with a gearing of 0.15 times as of March 31, 2025. It has nil long-term debt and largely unutilized working capital lines. Credit ratings are supported by a cash surplus of INR 2,150 crore.

⚙️ Operational Drivers

Raw Materials

Key raw materials include Copra (major cost driver), Vegetable Oil (Sunflower oil, Rice bran oil), Liquid Paraffin (LLP), and HDPE for packaging. Material costs (Raw + Packaging) accounted for 57.4% of revenues in Q2 FY26.

Import Sources

Over 94% of procurement is done from local/indigenous sources within India and its international operating regions like Bangladesh and Vietnam.

Key Suppliers

Not disclosed in available documents; however, the company engages with over 7,700 stockists and has a framework (Samyut) to assess critical material partners.

Capacity Expansion

Marico expanded its manufacturing footprint to four facilities in FY24. While specific MTPA is not disclosed, surplus cash is earmarked for enhancing in-house capacities to support volume growth.

Raw Material Costs

Copra prices saw a YTD increase of 113% YoY as of Q2 FY26. Material costs rose to 57.4% of revenue in Q2 FY26 from 49.2% in Q2 FY25. The company uses pricing actions in core portfolios to offset these sharp inflationary trends.

Manufacturing Efficiency

Maintains healthy working capital ratios with an Inventory Turnover of 35 days and Debtors Turnover of 41 days as of Q2 FY26.

Logistics & Distribution

Marico has a retail reach of 57 lakh outlets in India and a direct reach of over 10 lakh outlets, supported by 7,700+ stockists and distributors.

📈 Strategic Growth

Expected Growth Rate

10%+

Growth Strategy

Growth will be driven by a 7% volume growth target in India, expansion of the Digital-first Premium Personal Care portfolio (which crossed INR 1,000 Cr ARR), and scaling the Foods business. The company also plans mid-sized acquisitions and increased rural reach to sustain momentum.

Products & Services

Coconut oil, hair oils, premium refined edible oils, premium hair care, health foods, male grooming products, and digital-first personal care brands.

Brand Portfolio

Parachute, Saffola, Nihar, Hair & Care, Livon, Set Wet, Beardo, Plix, and Just Herbs.

New Products/Services

Expansion into the Foods and Digital-first portfolios. The Digital-first portfolio already contributes an ARR of over INR 1,000 crore.

Market Expansion

Focus on increasing rural reach in India and sustaining 20% CCG in international markets like the Middle East and Southeast Asia.

Market Share & Ranking

More than 95% of the business is gaining or sustaining market share as of Q2 FY26.

🌍 External Factors

Industry Trends

The FMCG industry is seeing a shift toward Digital-first D2C brands and premiumization. Marico is positioning itself by scaling its digital-first ARR to INR 1,000 Cr+ and focusing on health-centric food innovation.

Competitive Landscape

Intense competition from established FMCG giants and emerging D2C players like HUL's Oziva in the wellness segment.

Competitive Moat

Marico's moat is built on brand leadership (Parachute, Saffola), a massive distribution network of 57 lakh outlets, and cost leadership in Copra procurement. These are sustainable due to high penetration (75% of business gaining/sustaining penetration).

Macro Economic Sensitivity

Favorable monsoons and GST reforms are expected to boost disposable incomes and aid consumption across urban and rural markets.

Consumer Behavior

Shift toward premium personal care and healthy foods is driving growth in the Saffola Foods and Digital-first segments.

Geopolitical Risks

The Bangladesh crisis in 2024 had minimal impact due to robust distribution and high product shelf life, with the region returning to double-digit CCG by Q3 FY25.

⚖️ Regulatory & Governance

Industry Regulations

Complies with SEBI's Business Responsibility and Sustainability Report (BRSR) and National Guidelines on Responsible Business Conduct (NGBRC).

Environmental Compliance

Marico aims for Net Zero in operations by 2040. 96% of packaging is currently recyclable, with a target of 100% by FY25. It has created 2.83 billion liters of water conservation capacity.

⚠️ Risk Analysis

Key Uncertainties

Volatility in raw material prices (Copra/Vegetable oils) can impact margins by over 300-400 bps. Competitive intensity in the premium segment from D2C players is a key monitorable.