Marico bets on premium demand as it sees strong Q2

Marico anticipates double-digit growth in consolidated revenue for Q2 of FY27, driven by robust domestic demand, strong volume increases in key product lines, and growth in premium and digital businesses. This announcement arrives amidst a challenging market environment, where companies must balance sustained consumption with fluctuating inflation and input costs.

The company's success highlights the ongoing trend of premiumization and branded consumption, with favorable copra prices further boosting margins. Copra, the dried coconut kernel used for oil extraction, is expected to contribute positively to the company's profitability. Marico's range of coconut oils, including pure and hair oils, as well as enriched and virgin culinary oils, under its Parachute and Coco Soul brands, continue to perform well.

The company's strong first-half results suggest it is on track to exceed its short-term targets across crucial financial metrics. India's business maintained solid momentum, with underlying volume growth reaching double digits. Parachute Coconut Oil saw early-teens volume growth, attributed to its strong brand equity, consumer trust, and supply-chain advantages.

Value Added Hair Oils delivered its sixth consecutive quarter of impressive growth, with volume growth reaching the twenties, thanks to its franchise strength and structural growth changes. Saffola Oils contributed to mid-single-digit growth, while volumes declined as the company focused on maintaining profitability and rationalizing supplies.

The foods and premium personal care segments, including digital-first brands and shampoo, also maintained their growth momentum. Internationally, Marico saw constant-currency growth in the teens, supported by strong performances in Vietnam, the Middle East, and South Africa. In Bangladesh, the business experienced a marginal sequential improvement, despite facing high base inflation.

Marico anticipates double-digit consolidated revenue growth, driven by its core, digital, and international portfolios. On the cost side, crude-linked derivatives became more expensive during the quarter, while copra prices remained around 35% below their peak levels. The company expects gross margins to accelerate year-on-year, thanks to a favorable product mix and lower copra prices.

Marico's increased investments in advertising and sales promotion aim to strengthen brand building and growth initiatives. The company expects operating profit to grow in the mid-twenties, driven by its strong first-half performance and projected growth in key financial areas. Marico remains optimistic about consumption trends and continues to monitor inflationary conditions, reaffirming its commitment to sustainable and profitable volume-led growth in the medium term.