Marico Set For Double-Digit Growth This Despite Margin Contraction Last Quarter, Says CEO

Marico Ltd. is hopeful of achieving double-digit growth for fiscal 2025, even in the face of a potential 50 basis point contraction in Ebitda margin, said Chief Executive Officer and Managing Director Saugata Gupta.

The maker of Parachute hair oil, in its financial results for the quarter that ended Sept. 30, 2024, reported a 50 basis point year-on-year decline in Ebitda margin to 19.6%. Net profit, however, increased 20.2% on-year in the period to Rs 433 crore from Rs 360 crore in the same quarter last year. 

Talking to NDTV Profit, Gupta expressed optimism about the company’s potential to boost its margins in the second half of the fiscal, but noted that inflation could pose a challenge to achieving that goal.

“We will be watchful about overall inflation and it will have some impact in terms of our operating margins to the extent of 50 basis points for the full year. But having said that, we endeavour to maximise revenue and volume growth and market share,” he said.

The Marico MD said he is not very concerned about the drop in the margins. 

“We are far more concerned if we can continue to deliver a sequential increase in volume growth, as well as a double-digit revenue growth for the full year,” he revealed.

The price hike announced in September would boost the company's revenue for fiscal 2025, Gupta said.

“We will see the benefits of the price hikes more towards Q3 and Q4, which will lead to a double-digit revenue growth in the second half of the year. We will also aspire to make it a double-digit for the full year,” he said.

Marico’s revenue from operations increased 8% YoY in Q2 to Rs 2,664 crore from Rs 2,476 crore a year ago. For the first half of the year, revenue increased 7% YoY to Rs 5,307 crore versus Rs 4,953 crore in the same period of last fiscal.

Speaking about key areas that could bring volume growth for the company in second half, Gupta said that its premium urban portfolio, like Saffola oil, as well as non-premium portfolios, like hair oils including Parachute, have remained immune to any stress.

“I think the rural segment continues to hold steady. We should deliver a double-digit uptick in volumes in the second half of the year,” he said.

Shares of Marico Ltd. on Wednesday jumped 9.19% to touch an intraday high of Rs 687 apiece on the NSE. The stock was trading 4.23% higher at Rs 655.75 at 12:47 p.m., while benchmark Nifty 50 was down 0.07%.