Marico Q2 Update: Consolidated Revenue Growth Remains In Double Digits
Marico expects gross margins to decline annually due to partial absorption of rising input costs, as the company remains focused on expanding its consumer base.
Marico Ltd.'s domestic business posted mid-single digit volume growth, showing improvement quarter-on-quarter in the July-September period of fiscal 2025.
The fast moving consumer good sector saw stable demand trends during the second quarter, the maker of Parachute coconut oil said in its quarterly business update.
The rural segment outperformed the urban segment on a year-on-year basis, for the third quarter in a row, it said.
Domestic Business
Parachute coconut oil posted close to mid-single digit volume growth, as per the company. The lower growth was on the back of the ml-age reduction in one of the key price-point packs, in lieu of a price increase. The brand has taken another round of price hikes at the end of the quarter ended Sept. 30, 2024, due to higher copra prices.
Saffola Oils also posted weak revenue growth in low single digit numbers.
While the Value Added Hair Oils segment saw subdued growth due to competitive headwinds, the company expects gradual improvement in demand trends.
The foods and digital-first brands sustained their strong momentum and scaled up well ahead of targets, the company said.
International Business
Marico's international business delivered robust low teen constant currency growth, with each of the markets contributing positively, it said.
Bangladesh posted high-single digit growth, despite the difficult political environment, while Vietnam also grew in high single digits. MENA and South Africa maintained their robust double digit growth trajectory.
Growth Expectations
Consolidated revenue growth remained in the high single digits, with increased domestic realisations being counterbalanced by additional currency challenges in some international markets. Marico anticipates that its consolidated revenue growth will reach double digits in the second half of the year.
Key inputs show that copra prices rose beyond the company's internal forecasts. The recent import duty increase has caused vegetable oil prices to rise towards the end of the quarter.
Marico expects gross margins to decline year-on-year due to the partial absorption of rising input costs, as the company remains focused on expanding its consumer base in the current demand landscape.
