Marico's first-half performance driven by copra prices

Marico reported strong first-half results putting it on track to surpass near-term guidance across key financial parameters. The company expects consolidated revenue to grow at a double-digit rate in the second quarter of FY27.

Domestic demand and premiumisation drive core growth

Resilient domestic demand, strong volume growth across core franchises, and momentum in premium and digital-first businesses supported Marico’s performance. The India business maintained strong momentum during the quarter, with underlying volume growth touching double digits. Foods and Premium Personal Care, including digital-first brands and shampoo, maintained growth momentum.

Coconut oil brands lead volume gains

Parachute Coconut Oil posted early-teens volume growth, attributed to brand equity, consumer trust, and supply-chain advantage. Value Added Hair Oils delivered a sixth consecutive quarter of stellar growth, with volume growth touching the twenties. This growth is due to franchise strength, a structural shift, investments in mid and premium segments, Project SETU, and Almond category expansion.

In contrast, Saffola Oils delivered mid-single-digit price-led growth, while volumes declined due to a focus on threshold profitability and rationalised supplies.

Favourable copra prices boost margin outlook

Copra, the dried kernel of coconut used to extract oil, is a key input for Marico. The company offers coconut oils under the Parachute and Coco Soul brands, spanning pure edible, hair oils, enriched variants, and virgin culinary oils. Copra prices remained rangebound at about 35% below peak levels.

This enables Marico to expect strong year-on-year gross margin acceleration from a favourable portfolio mix and lower input costs. The favorable copra prices are expected to enhance profit margins. The company also expects operating profit to grow in the mid-twenties.

International and digital businesses show sustained momentum

Marico’s international business posted constant-currency growth in the teens, led by Vietnam, the Middle East, and South Africa. Bangladesh saw marginal sequential improvement but faced a high base and persistently elevated inflation.

Consolidated revenue is expected to grow in double digits, supported by the core, digital, and international portfolios. Investments in advertising and sales promotion increased significantly for brand building and growth initiatives. Marico reiterated its aspiration of delivering sustainable and profitable volume-led growth over the medium term. The performance points to continued strength in premiumisation and branded consumption within the broader consumer goods market, which is handling a volatile operating environment. Companies are balancing resilient consumption against evolving inflationary conditions and uneven input costs.

Marico expects double-digit revenue growth in Q2 FY27.