Marico sees sustained growth momentum, raises FY27 margin outlook

ET Intelligence Group: Marico reported strong double-digit revenue and profit growth in the September quarter, driven by healthy demand across coconut oil, foods and premium personal care, while lower copra prices supported margins. Growth momentum is expected to remain strong, aided growth in foods and premium portfolios, improving international business performance and benign input costs, prompting the company to raise its Ebitda margin outlook to the mid-20% range from around 20% earlier. Marico shares rallied 9.4% on Tuesday to ₹873.2, ending at day's high. Analysts have retained 'Buy' ratings with a potential upside of 12-15% from Tuesday's close.

The Foods portfolio grew 45% year-on-year, crossing an annualised revenue run-rate (ARR) of ₹1,500 crore, driven by strong demand for Saffola foods and nutrition brands. Expansion in protein and nutrition categories are expected to drive growth for foods portfolio. Premium personal care growth was led by Beardo, Livon and Parachute Advansed Protein Shampoo. The shampoo portfolio's ARR is expected to cross ₹100 crore in its first year, with a medium-term aspiration of ₹400-500 crore. The digital-first businesses are expected to reach double-digit Ebitda margin by FY27.

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Project SETU is expected to support growth by expanding Marico's direct retail reach and rural penetration, which will likely add 1-2% to annual volume growth. Improving performance in key overseas markets such as Vietnam, the Middle East and South Africa, along with a gradual recovery in Bangladesh, is likely to further strengthen growth momentum.

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The company expects to deliver double-digit volume growth in India and revenue growth in teens at the consolidated level, with annual revenue likely to surpass ₹15,000 crore from ₹13,611 crore in FY26. Marico has advanced its ₹20,000 crore revenue goal by a year to FY29 instead of FY30. The improved growth outlook has led the company to raise its FY27 Ebitda growth guidance to the mid-20% range from around 20% earlier.