Consistently healthy performance captured in Marico's high stock valuation

Among key performers in the portfolio, Parachute coconut oil posted 22 per cent YoY value growth with 1 per cent volume decline, due to price hikes

Marico reported consolidated revenue growth of 20 per cent year-on-year (Y-o-Y) during the January-March quarter (Q4) of FY25.

 

Domestic revenue surged 23 per cent Y-o-Y, while volume growth was 7 per cent. International growth stood at 11 per cent (16 per cent in constant currency growth).

 

Among key performers in the portfolio, Parachute coconut oil posted 22 per cent value growth with 1 per cent volume decline, due to price hikes.

 

Copra inflation led to an additional 8-10 per cent price rise in April 2025, bringing the total price hike to 30 per cent. 

 

Apart from copra, vegetable oil prices rose 25 per cent in FY25. Crude oil derivatives were stable.

 

In Q4, revenue from value-added hair oil was up only 1 per cent, due to weakness in the mass segment. Saffola’s volumes were down marginally, while its revenue was up 26 per cent.

 

The foods category saw 44 per cent Y-o-Y growth.

 

Margin pressure persists with gross margin down 300 basis points (bps) Y-o-Y to 48.6 per cent.

 

Ad spend increased 35 per cent with earnings before interest, taxes, depreciation and amortisation (Ebitda) margin contraction at 260 bps to 16.8 per cent. Ebitda grew 4 per cent and profit after tax (PAT) was up 8 per cent to ₹340 crore.

 

The company expects margin pressure over the next 1-2 quarters, due to copra prices.

 

Revenue growth is expected to remain in double digits during FY26. This would be driven by price hikes, expanded direct reach, and strong performances in foods and premium personal care.

 

The food category’s gross margin rose 200 bps on a net revenue of ₹900 crore in FY25.

 

Consolidated net sales grew 20 per cent to ₹2,730 crore in Q4FY25.

 

Domestic revenue growth was 23 per cent and international business delivered 16 per cent constant currency growth. Bangladesh grew 11 per cent, Middle East and North Africa (Mena) surged 47 per cent and South Africa was up 13 per cent.

 

However, Vietnam saw 1 per cent decline on a constant currency basis.

 

According to the company management, sentiment was stable, sustained by improving rural demand.

 

Quick commerce contributed 3 per cent to Indian revenues in FY25. Digital-first brands closed with an average run rate of ₹750 crore in Q4FY25.

 

Marico has not yet seen significant volume impact from the recent price hikes. 

 

Internationally, it has premiumised its portfolio, expanding into personal care categories like shampoos, skincare, hair styling and baby care. The premium share of international business is now 29 per cent.

 

The company’s ‘Project SETU’ (plan to increase direct distribution) is driving growth in general trade through expansion of direct reach.

 

The South and Maharashtra are Parachute’s markets, where the SETU’s focus is on increasing penetration and diversification.

 

About 95 per cent of domestic business gained or held market share and 80 per cent of the business gained or sustained penetration.

 

Foods and premium personal care growth is 22 per cent (with a target of 25 per cent by FY27-end).

 

Parachute and Saffola volumes were disappointing, down 1 per cent/low-single digit, while value-added hair oil’s revenue grew only 1 per cent.

 

In FY26, Marico expects to sustain double-digit revenue growth and targets double-digit operating profit growth.

Correction in copra prices may happen in Q2FY26. Ad spend in FY26 is expected to be similar to FY25.

 

Margins may improve in the second half of FY26 but the copra inflation cycle is crucial.

 

The stock was among the top performers among fast-moving consumer goods (FMCG) peers with over 39 per cent return in the past one year. 

 

While analysts remain positive on the company, valuation multiples assigned are high at forward PEs of 47-50x.

 

According to Bloomberg, 25 of the 34 analysts polled in May are bullish, six are neutral and three are bearish.

 

Their average one-year target price is ₹762 against Monday’s closing price of ₹723.25 on the BSE.