MARICO - Marico Limited Share Price

Management's outlook for Marico is optimistic, focusing on a gradual and broad-based recovery in consumption sentiment, supported by easing retail and food inflation, favorable monsoon conditions, and increased government spending. They aim for high single-digit volume growth in India, striving for double-digit growth in certain quarters, with a target of around 25% revenue growth for the financial year.

Key forward-looking points include:

1. India Business Growth: The India business recorded revenue growth at multi-year highs, with underlying volume growth nearing double-digits.
2. Parachute Oil: Parachute has sustained its market share amidst significant price increases exceeding 60%. Management anticipates recovering volume growth as pricing normalizes.
3. Value-Added Hair Oils (VAHO): Expected to maintain double-digit growth driven by mid and premium segments, benefiting from Project SETU which is enhancing direct distribution.
4. Foods Segment: The Foods portfolio aims for over 25% growth this year, with the core Saffola franchise growing in double digits.
5. Sustainability Goals: The company is committed to its Sustainability 2.0 framework, aiming to meet 2030 goals while balancing profitability and growth.
6. Digital Brands: The Digital-first portfolio is on track to achieve 2.5x FY24 ARR by FY27, contributing significantly to revenue and margin improvements.
7. International Business: High-teen constant currency growth is expected, particularly from Bangladesh, while challenges in Vietnam are acknowledged.

Overall, management is confident in navigating inflationary pressures and leveraging their position for sustainable growth and profitability over the medium term.

Q&A Section from Earnings Transcript - August 4, 2025

1. Question: "How is the supply side of copra looking and what kind of correction do you see in the next two, three quarters?"

Answer: I believe the correction has begun, and we now have better control over the supply chain as a significant buyer of copra. Despite previous price increases, our transaction terms show slight growth. By the second half, we expect to have a clearer outlook. Stable pricing is anticipated as of now.

2. Question: "Would you expect VAHO volume growth to accelerate given the recovery in urban areas?"

Answer: We've pivoted towards investing in medium and premium brands. With benefits from Project SETU, we are confident in maintaining double-digit growth in Value-Added Hair Oils, especially since non-Amla segments are showing strong volume growth.

3. Question: "In the International business, can you comment on the 42% CCG growth in the Gulf and Egypt?"

Answer: The growth in MENA is driven by market share gains in core categories and new product launches. We're committed to this growth trajectory, supported by our investments.

4. Question: "How do you address the cut in advertising spends in India despite volume growth?"

Answer: The cut in advertising pertains mainly to non-media spends and some categories due to competitive pressures. We're reallocating our budget to maintain our share of voice in focus areas while ensuring media spending remains uncompromised.

5. Question: "What factors led to the inflated copra prices?"

Answer: Copra prices spiked due to a 9% drop in coconut productivity and unseasonal rains affecting the conversion cycle. Speculation also played a role. However, we foresee stabilization as consumption adjusts.

6. Question: "What can you say about the 60% price increase on Parachute and the potential impact on volume?"

Answer: This figure is a point-to-point observation. We believe that with careful management, minor volume pressures may occur, but overall consumer resilience and brand loyalty should prevent significant declines.

7. Question: "What are the revenue expectations for the Foods business given the Q4 growth moderation?"

Answer: Our expectation remains strong for over 25% growth in the Foods business this fiscal year, with core segments like Saffola growing double digits, indicating a solid performance.

8. Question: "Regarding the Rs.20,000 Crores revenue target by FY27, how much of this is expected to come from organic versus inorganic growth?"

Answer: Our strategy focuses on organic growth, with acquisitions serving as accelerators. Our recent performance indicates a robust foundation for achieving mid-teens growth organically.

9. Question: "Is there a concern regarding pests impacting copra yield?"

Answer: There's no significant widespread concern about pests affecting crop yield this year. We believe the current situation is manageable and are cautiously optimistic about stability moving forward.

10. Question: "Can we both increase prices and maintain volume amidst copra price fluctuations?"

Answer: Yes, we believe that through strategic pricing management and a strong brand value, we can sustain volumes while handling margin pressure effectively in the market.