Geopolitical tensions push input costs up, Marico turns to pricing and scale

Marico , the maker of Parachute and Saffola said tensions in the Middle East have started pushing up vegetable oil and food-linked input costs, even as copra prices have eased sharply from their peak. The company, however, does not see any immediate disruption to its operations.

“Despite ongoing geopolitical tensions, we have maintained strong supply-chain assurance through strategic positioning across raw materials, packaging materials, and finished goods, and do not foresee any material disruption in the near term,” said Saugata Gupta, managing director and chief executive officer, during the earnings call.

The comments come at a time when companies with global sourcing exposure are grappling with supply uncertainties and cost volatility triggered by geopolitical conflicts. For Marico, which derives a part of its business from international markets including the Middle East and Africa, the risks are real but contained.

Calibrated response to cost pressures

Gupta noted that while copra prices have corrected by around 35% from their peak, offering some relief to the core coconut oil portfolio, vegetable oil prices continue to remain elevated due to geopolitical disruptions. “Vegetable oils and other food-linked inputs continue to exhibit an upward bias driven by ongoing geopolitical tensions in the Middle East,” he said.

To offset this, the company has already initiated selective price hikes. “We have implemented price hikes which will neutralise the impact,” Gupta said, adding that Marico will continue to rely on calibrated pricing actions and cost management to protect margins.

The company’s strategy hinges on balancing these cost pressures with demand recovery. With pricing stabilising in key categories like Parachute, Marico expects consumption to gradually pick up, with visible improvement starting early Q1 FY27.

“We expect a recovery in consumption with a pickup in volume growth, which will be evidently visible from Q1 FY27 itself,” Gupta said.

At the same time, Marico is leaning on its scale and backend strength to stay competitive. Gupta pointed out that the company’s supply chain agility and distribution reach position it better than smaller peers in absorbing shocks. “Our supply-chain and back-end advantages will act as a competitive advantage over smaller players and drive superior volume growth and market share gains,” he said.

Internationally, the company reported that while some supply-side constraints were visible in the Gulf during March, the overall exposure to the Middle East remains limited. The region contributes only about 4% to Marico’s total turnover, reducing the risk of any outsized impact.

The broader business continues to show resilience. Marico reported multi-year highs in volume growth in its India business and constant currency growth in international markets in FY26. The company is targeting high single-digit volume growth domestically in FY27 and sustained momentum overseas.

A key part of its long-term strategy is to reduce dependence on commodity-linked segments, which are more vulnerable to global disruptions. Over the next few years, Marico plans to bring down the share of such businesses from over 70% to around 50%, while scaling up premium personal care and foods.

“We will remain disciplined in passing on input cost movements through calibrated pricing actions, while continuing to drive premiumisation and pushing for higher growth in cold-pressed oils,” Gupta said.

With a sharper portfolio mix, stronger digital investments and continued focus on supply chain resilience, Marico believes it is well placed to manage geopolitical volatility while sustaining growth. The company is targeting double-digit revenue growth over ₹15,000 crore in the near term, with an ambition to cross ₹20,000 crore by FY30.