Marico’s digital brands cross Rs 1,000 crore ARR as profitability targets sharpen

New Delhi: Marico’s digital portfolio has crossed the Rs 1,000 crore annual recurring revenue threshold, with the company expecting food and premium personal care to contribute a quarter of its India revenue in the coming years, Managing Director and Chief Executive Officer Saugata Gupta said.

The company’s digital brands, Studio X, Pure Sense, Beardo and True Elements, span premium personal care and food. Gupta said these brands continue to record strong growth.

“Our digital brands have crossed Rs 1,000 crore in ARR (annual recurring revenue), and we expect the diversified portfolio… including premium personal care, to contribute at least 25 per cent to our overall India business, over the next three years,” Gupta told PTI.

Beardo is close to turning profitable, recording double-digit EBITDA, while Marico’s D2C wellness brand Plix has reached break-even. “Our objective is to immediately take it to a mid-single-digit to high single-digit EBITDA,” Gupta said, adding that the objective is “to grow well, and at the same time, grow profitably”.

True Elements and Just Herbs have yet to break even. “So, over the next 18 months, we need to ensure they break even and continue to grow. Our objective of achieving 2.5x of FY24 ARR and a 10 per cent EBITDA by FY27 remains intact,” he said.

Marico’s food portfolio, which includes Saffola and Coco Soul, has also crossed the Rs 1,000 crore ARR mark. “We expect the Foods category to return to over 20 per cent growth by Q4 and also continue that momentum into Q1 next fiscal year. Our focus remains on ‘fewer, bigger, better, and relevant’ for the food business, as we have learned that scale drives profitability,” Gupta said.

The company has improved gross margins by 1,000 basis points over the past two years. Gupta said the broader portfolio needs to bolster both revenue and profitability. He also expects the core brands to perform better next fiscal.

“We also expect an improvement in the growth of our core brands as we move into next year. As the pricing normalises and cost pressures ease, Parachute should return to growth,” he said.

He added that “value-added hair oils have seen a strong turnaround, and we are confident of delivering double-digit growth over the next two quarters”.

Gupta noted signs of recovery in consumer sentiment. “Overall, the landscape is improving, and the environment is gradually getting better. Rural demand has been fairly stable, and urban markets are also showing improvement. The GST cut should further support in driving consumption,” he said.

In the September quarter, Marico posted a slight decline in consolidated net profit to Rs 432 crore due to a high base and commodity inflation. Revenue rose 30.7 per cent to Rs 3,482 crore, supported by volume growth in India and international gains.

Marico, which crossed the Rs 10,000 crore revenue milestone in FY25, has stated its intention to grow to Rs 20,000 crore by 2030.