Marico to prioritise margins over volumes in certain segments

Mumbai: Marico is becoming highly selective about where it chases growth and is willing to sacrifice volumes in commoditised businesses, slow the pace of acquisitions and prioritise profitability over rapid expansion, the consumer goods company's chief executive said.

This marks a shift from Marico's earlier focus on building scale through acquisitions and rapid expansion, with the company now placing greater emphasis on premiumisation, higher-margin businesses and stronger returns from its new brands. The strategy was visible in June quarter, with company reducing supplies of some lower-margin Saffola oil variants as it aimed to protect margins.

Also Read: Marico targets Rs 15,000 crore revenue in FY27, eyes Rs 20,000 crore by FY30 on premiumisation push


"We are willing to forgo volumes in certain channels that do not meet our threshold level of profitability," Saugata Gupta told ET, adding that over the long term, the company aims to position Saffola into a larger food brand. According to Gupta, who is also the company's managing director, the move reflects Marico's view that "market share in a completely price-sensitive, commoditised category is never sustainable".

For the first quarter of fiscal 2027, the company reported consolidated revenue of ₹3,957 crore, up 23% year-on-year, even as domestic volume sales grew 11%. Its Ebitda margin was 20.7% despite continued inflation in vegetable oils and crude-linked inputs. Gupta attributed the margin resilience to a combination of easing copra prices, a stronger premium mix and improving profitability across the company's new businesses.

"There has been significant work on resource allocation behind fewer, bigger bets. We have focused on improving the portfolio mix, with the premium segment growing in the mid-teens," he said, adding that the company continues to invest behind its brands, with advertising spends rising 25% last quarter. The focus on profitability also extends to Marico's acquisition strategy. After building a portfolio of digital-first brands over the past few years, the company is now more focused on improving profit over chasing rapid growth.

Also Read: FMCG companies reap rewards from digital-first brand acquisitions as online bets drive growth

"We're comfortable with a lower growth rate," Gupta said. "We would rather achieve 20%-25% growth while significantly improving the Ebitda profile," he said, adding that the company expects its digital brands to exit the year with Ebitda margins approaching double digits.

The same philosophy is visible in Marico's distribution strategy: Project Setu. While quick commerce continues to grow rapidly across the sector, Marico is continuing to invest aggressively in general trade. Quick commerce grew 50% within ecommerce during the quarter.

"I strongly believe that over the last four to five years, the barriers to entry have drastically reduced, enabling virtually any brand to create an online presence," he said.