Marico expects mid-single-digit volume growth in Q2

Fast-Moving Consumer Goods (FMCG) maker Marico has witnessed stable demand with rural outperforming urban year-on-year during the Q2FY25.

The company’s domestic business posted mid-single-digit volume growth while the international business delivered low teen constant currency growth during the quarter. Parachute Coconut Oil posted mid-single-digit volume growth impacted by ml-age reduction in one of the price-point packs due to price increases. Saffola Oils posted low single-digit revenue growth with the pricing cycle turned favourable after 8 quarters.

“Parachute Coconut Oil recorded double-digit revenue growth, aided by pricing interventions made at the start of the year. The brand has taken another round of price increases at the end of this quarter given the sequential rise in copra prices. Value Added Hair Oils was subdued amidst competitive headwinds in the bottom of the pyramid segment, but we expect gradually improving demand trends ahead on the back of visible ATL investments and brand activations across key franchises. Foods and Digital-first brands sustained their visibly strong momentum and scaled up well ahead of aspirations, thereby maintaining the pace of diversification as envisaged,” the company informed the stock exchanges.

Revenue consolidation

Mumbai headquartered Marico Ltd’s consolidated revenue growth remained in the high-single digits. In international business Bangladesh posted high-single digit growth, Vietnam grew in high-single digits, while MENA and South Africa maintained a double-digit growth trajectory.

“Among key inputs, copra prices rose ahead of internal forecasts and the recent import duty hike led to vegetable oil prices moving higher towards the end of the quarter. Crude oil derivatives remained rangebound. We expect gross margin to moderate on a yoy basis owing to partial absorption of higher input costs, as the Company prioritised expanding its consumer franchise in the current demand environment. Consequently, we expect a moderate lag in operating profit growth vis-à-vis revenue growth on a yoy basis. The Company expects to deliver double-digit revenue growth in this year. In view of the higher-than-anticipated degree of inflation in copra prices, sharp import duty hike in vegetable oils and potential uncertainty in crude oil prices in the wake of recent geo-political tensions, the company will focus on its revenue growth aspiration while remaining watchful on the margin front during the second half of the year,” added Marico.