Marico, one of India’s leading FMCG companies, is optimistic about achieving double-digit revenue growth in FY25. According to Saugata Gupta, MD & CEO of Marico, the company is seeing continuous improvement in volume growth every quarter. This growth will be further supported by price hikes and strong demand, helping the company maintain its leadership position in the market.
Steady Growth Despite Inflation Challenges
While Marico expects strong revenue growth, inflationary pressures on material costs could impact profitability in the second half of FY25. However, Gupta remains confident that Marico’s cost management strategies will help maintain an operating margin of around 20%.
“Despite rising input costs, our cost management system will ensure stability in profitability,” Gupta said.
Marico’s Diversification and Digital Expansion
The company continues to focus on diversification into the food segment, which has shown strong momentum. In the last two quarters, Marico’s food business reached an annual recurring revenue (ARR) of Rs 1,000 crore.
Additionally, Marico has expanded its digital business, with two of its digital brands achieving significant scale. The company’s digital operations have low cash burn, making them financially sustainable.
Marico’s international segment continues to perform well, recording double-digit growth in constant currency terms. Despite challenges in certain markets, the company has maintained resilience, particularly in Bangladesh, where it has successfully navigated market headwinds.
Price Hikes in Saffola and Parachute
Marico recently increased prices for Saffola due to the rise in import duty on edible oil imposed by the government. The company may also increase prices for its coconut oil brand Parachute, depending on copra price fluctuations.
“We have already taken pricing actions for Parachute and may introduce another round of price hikes if required. However, we expect copra prices to ease by Q1 of the next fiscal,” Gupta explained.
Gupta believes that tax breaks announced in the recent budget will improve consumer sentiment, particularly in urban markets. While food inflation is softening, the tax incentives given to the middle class could boost consumption across multiple categories, including FMCG.
“These tax breaks will improve sentiment and spending, though the impact on FMCG will be gradual. Consumers will allocate disposable income across different sectors, including personal care, beauty, and food products,” Gupta noted.
Consistent Volume Growth Driving Success
Marico’s core brand Parachute has experienced positive volume growth, contributing to the company’s overall success. In the December quarter, Marico reported:
- 5.2% growth in net profit
- 15.35% rise in consolidated revenue, reaching Rs 2,794 crore
Gupta attributed this success to steady volume growth in every quarter, reinforcing Marico’s position as a leading player in the FMCG sector.
With a strong business strategy, continuous innovation, and expanding digital footprint, Marico is set to maintain its growth trajectory in FY25, despite market challenges.
