Marico sees about 30% revenue growth YoY in Q2, FY26 on favourable product mix, pricing moves

Marico said on Friday that its second-quarter consolidated revenue growth may touch 30%, driven by pricing interventions and a favourable product mix. The FMCG sector witnessed stable demand trends for most of the quarter, thereby closing the first half of the year on a strong note.

“Consolidated revenue growth on a year-on-year basis will be touching the thirties on the back of pricing interventions and mix improvement, thereby closing the first half of the year on a strong note and staying well on course to achieve the full year aspiration,” the company said today in an exchange filing on the second quarter update. 

“We expect sentiment to gradually improve during the upcoming festive season and months ahead, aided by easing inflation, above-average monsoons, healthy crop outlook and policy stimulus,” the company said in the filing. Marico views the rationalisation of GST rates as a welcome step towards catalysing demand and the long-term growth of the sector.

“About 30% of our India business has benefited from the GST rate rationalisation. In line with the intent of the Government’s measures, we have passed on the benefits of revised GST rates to consumers across relevant product categories, reinforcing affordability and accessibility,” it added.

On the cost side, Marico stated that copra prices remained “rangebound” after correcting by 10–12% from their highs. Vegetable oil prices, on the other hand, also sustained high levels, while crude oil derivatives were benign. “Owing to the above, gross margin is expected to come under incremental pressure, on a relatively high base and partly due to the pricing-led high denominator effect.”

Marico expects gross margin pressures to ease in the second half of the year. “Despite the input cost push, we sustained brand-building investments to reinforce the long-term equity of our franchises and drive accelerated portfolio diversification,” it said. Additionally, Marico extended discounts on the pipeline inventory to its channel partners during the two weeks preceding the effective date of the GST rate changes. “In the given context, we expect modest operating profit growth on a year-on-year basis.”

The underlying volume growth in the India business, according to Marico, remained in high single digits, albeit moderating sequentially. Product-wise, Parachute recorded a low single-digit decline in volumes amid unprecedentedly high inflationary input costs and pricing conditions. “After normalising for ml-age reductions in lieu of price increases, the brand was flattish in volume terms during the quarter, demonstrating formidable strength even after effective price hikes of more than 60% on a year-on-year basis.”

Saffola Oils, on the other hand, delivered flattish volumes with a high base and revenue growth in the high teens. Value Added Hair Oils delivered high teens growth, reflecting a sustained recovery path. “We expect the franchise to maintain a healthy growth momentum over the near and medium term, supported by the strategic focus in the mid and premium segments of the portfolio, enhanced direct reach driven by Project SETU and the recent GST rate rationalisation.”

Foods and Premium Personal Care (including digital-first brands) continued to maintain the accelerated scale-up and kept up the pace of diversification. Marico’s international business maintained robust momentum, with constant currency growth reaching the twenties. “Bangladesh and MENA businesses visibly outperformed, while other markets were steady in their course.”

Marico said that it is on track to achieve full-year revenue targets, and maintains its aspiration of delivering sustainable and profitable volume-led growth over the medium term.

Marico shares closed 1.43% higher on Friday at ₹710.65 apiece.