Business1 min read

Marico’s profits roar back. Can it sustain gains beyond copra windfall?

By · Published by Everything Blog

In short

The company's September quarter performance was anchored by an operating margin surge to 18.2% after key raw material costs dropped 35% from their peak. Strong momentum in international markets like Vietnam and domestic gains in hair oils helped offset high single-digit volume declines in the Saffola portfolio. Taking advantage of the cost relief, management increased advertising and promotion spending by 44% to a decade-high ₹451 crore. Despite raising full-year profit guidance, consolidated revenue failed to meet analyst projections amid potential inflation in vegetable oils and crude derivatives.

Key points

  • Management advanced its target of reaching ₹20,000 crore in revenue by one year to fiscal…: Management advanced its target of reaching ₹20,000 crore in revenue by one year to fiscal year 2029.
  • Substantial price cuts on flagship products created a major divergence between double-dig…: Substantial price cuts on flagship products created a major divergence between double-digit volume growth and low value growth.
  • Sustained future performance remains vulnerable to inflation in crude-linked inputs along…: Sustained future performance remains vulnerable to inflation in crude-linked inputs alongside regional geopolitical tensions.

Sources checked by our analysis pipeline: 1

Marico’s investors have reason to change their mind after the September quarter (Q2FY27) earnings announced post-market hours on Monday. The stock gained about 8% on Tuesday. Recall that the stock had slumped 9% after its Q1 results.

The turnaround in sentiment has come on the back of market-share gains and a sharp recovery in profitability, with consolidated Ebitda growing 27% year-on-year, the fastest growth in 50 quarters, as per Marico. The Ebitda margin expanded 200 basis points (bps) to 18.2%, benefiting from softening of copra prices year-on-year.

But with revenue missing estimates and commodity prices remaining a wild card, the question is whether this optimism can last. Consolidated revenue grew 13% year-on-year in Q2, while net profit rose faster at 31% to ₹550 crore. India underlying volume growth stood at 10% and revenue growth was 9%, reflecting healthy demand and improving distribution.

More than 95% of the portfolio gained or sustained market share and penetration on a moving annual total basis. Traditional and organized trade grew in double-digits, while quick commerce gained momentum, making up for the uneven growth reported…

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