Marico bets on brand building, eyes long-term equity as Q1 margins stay tight

New Delhi: Marico expects a 'modest operating profit' in the June quarter as it continued to witness sequential inflation in some key raw material inputs as copra, the home-grown FMCG maker said in its latest quarter updates.

While vegetable oil prices eased following the cut in import duty by the government and crude oil derivatives remained rangebound," it added.

Owing to this, gross margin is expected to be under "incremental pressure, on a particularly high base and partly due to the pricing-led high denominator effect.

Despite the input cost push, Marico said it continued to invest in brand building as per its intent to strengthen the long-term equity of its franchises and accelerate portfolio diversification.

"In the given context, we expect modest operating profit growth on a year-on-year basis," Marico said.

However, Marico which owns brands as Saffola, Parachute, Hair & Care, Nihar and Livon etc, also said it expects gross margin pressures to ease from the second half of this financial year.

In the FMCG sector, Marico said it witnessed a "consistent demand pattern" in the June quarter, with improvement from the rural market.

"During the quarter, the sector exhibited consistent demand patterns, marked by improving trends in rural markets and steady urban sentiment. We expect gradual improvement in the quarters ahead, supported by easing inflation, a favourable monsoon season and policy stimulus," the company said.

According to Marico, amidst this backdrop, its underlying volume growth in the domestic business continued to improve sequentially to reach a multi-quarter high, driven by positive trends in the core franchises and continuous scale-up of new businesses.

Parachute witnessed a marginal dip in volumes in the unprecedented hyperinflationary input cost and pricing conditions. The brand's resilience, reflected in its pricing inelasticity and enduring equity, was evident in its ability to absorb substantial price hikes and millilitre or ml-age reductions, including a notable increase in June 2025, with minimal impact on volumes," it said.

After normalising for grammage changes, Parachute remained on a growth path in terms of number of packs sold during the quarter.

Saffola Oils posted a revenue growth in the high twenties, backed by mid-single-digit volume growth. Similarly, Value Added Hair Oils grew in low double digits.

Marico's international business delivered high-teens constant currency growth, driven by broad-based growth across most markets.

Overall, the "consolidated revenue growth on a year-on-year basis stood in the low twenties, marking a strong start towards delivering double-digit growth on a full-year basis, underpinned by the strengthening volume trajectory," it said.

It also added that the company maintains its aspiration of delivering sustainable and profitable volume-led growth over the medium term.

Marico Q1 updates provide an overall summary of the operating performance and demand trends witnessed during the quarter ended June 2025.

"A detailed information update will follow this once the Board approves the financial results for Q1 FY26," it said.