Marico Q1 Results Review - Growth Outlook Turns More Positive; Margins Likely Peak Out: Systematix

Systematix Research Report

Marico Ltd. delivered Q1 FY25 results in-line with expectations. Revenue growth of 7% YoY (after eight straight quarters of low growth) was on domestic volume/ international constant currency growth of 4%/10% YoY.

Parachute value grew 6% YoY (on volumes +2% YoY), while Saffola edible oils declined 1% YoY in value (on volume growth in mid-single digits but carry-forward price declines), and value added hair oil sales declined 5% YoY despite positive volume growth, amid weakness and market-share loss in bottom-of-pyramid segment.

Foods continued their robust run with value growth of 37% YoY, and premium personal care/ digital-first brands reached ARRs of Rs 3 billion/5.5 billion for Q1/exit-FY25 respectively.

Rural growth outpaced urban, and premium sales outpaced mass. Gross margin expanded 230 basis points YoY on benign input costs and better mix. Ebitda margin (operating profit margin) expansion of 50 bps YoY incorporated higher distribution costs (from Project SETU, inventory corrections in general trade) and high advertising and promotion (+50 bps YoY).

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