Marico's Q2 net profit rises 31% to Rs 550 crore

Marico reported a 31% rise in net profit for the July-September quarter, to Rs 550 crore. The consumer goods company said its revenue grew 12% to Rs 3,897 crore. Management expects double-digit growth through FY27.

The company said its EBITDA, a measure of operating profit, rose 27%. Its EBITDA margin widened to 18.2%, up from 16.2% a year earlier. Marico attributed much of the margin gain to a sharp improvement in gross margin, which it linked to a better product mix and lower copra prices. Copra is dried coconut kernel, used to make coconut oil.

Spending on advertising and sales promotion rose 44% to Rs 451 crore, compared with Rs 313 crore a year earlier. That took these costs to 11.6% of revenue, up from 9.1%. The company said the higher spending was meant to strengthen its brands and support growth initiatives.

India business and key brands

The India business grew 10% in revenue, to Rs 2,916 crore, on 10% underlying volume growth. Marico said more than 95% of its business held or gained market share and penetration over the moving annual total. Traditional and organised trade grew in double digits, and quick commerce accelerated.

Parachute Rigids posted 13% volume growth. Value-added hair oils grew 21% in value. The foods portfolio grew 45% and now runs at an annualised revenue of more than Rs 1,500 crore. Saffola edible oils grew 6% in revenue, even as volumes fell by a high single digit. The company said its premium range, led by cold-pressed oils, grew faster than the rest of the portfolio, and that it is cutting supply of lower-margin variants.

First-half performance

For the first half of FY27, revenue rose 18% to Rs 7,854 crore. Net profit grew 28% to Rs 1,180 crore. Advertising spend for the half year rose 36% to Rs 778 crore.

Saugata Gupta, Marico's managing director and chief executive, said the half-year results showed the company's diversified business model. He said it could grow across commodity cycles, and that Marico would keep investing in its brands.

The results show that the company's profit is growing faster than its sales, mainly because of cheaper raw materials and a richer product mix. Whether the margin gains hold will depend on input costs and on how much more the company spends on advertising. The company has not said how its FY27 double-digit growth target will be split between India and international operations.