Marico Limited — Q2 FY26 earnings call

Call held 14 Nov 2025

Management summary

Marico delivered a resilient Q2 FY26 with 7% India volume growth despite September's GST-related trade disruptions. Strong performance in VAHO, Foods, and the digital-first portfolio drove revenue to multi-quarter highs. While Parachute and Saffola oils faced volume challenges due to input cost inflation, management is confident in margin recovery and sustained double-digit EBITDA growth in H2 FY26, supported by easing commodity prices and strategic initiatives like Project SETU.

Highlights

  • India business delivered 7% volume growth despite September disruptions, with revenue growth hitting multi-quarter highs.

  • More than 95% of the India business gained or sustained market share, and over 75% gained or sustained penetration.

  • Value-added hair oils (VAHO) accelerated growth, gaining 150 bps in value market share, with mid and premium segments showing double-digit volume growth.

  • The Food portfolio crossed ₹1,100 crore ARR and grew 12% this quarter, with True Elements and Plix Nutraceuticals maintaining strong growth.

  • Digital-first portfolio exited the quarter with an ARR of over ₹1,000 crores, on track to reach 2.5x of FY24 ARR by FY27 and achieve double-digit EBITDA margins by FY27.

  • International business maintained robust performance, with Bangladesh ahead of expectations and MENA on an accelerated growth path.

Concerns

  • GST rate rationalization in September caused transitionary disruption in trade channels, impacting Q2 volume growth by approximately 2%.

  • Parachute volume was muted due to unprecedented hyperinflation in Copra prices and 60% pricing growth YoY, leading to ml-age drops and supply rationing to institutional customers.

  • Saffola oils were flattish in volume terms amidst elevated pricing environment.

  • Food portfolio growth was impacted by the last year of True Elements earn-out, Flipkart accounting adjustments for Plix, and a focus on improving Plix profitability and mix, leading to a temporary 'pause' for 2 quarters.

  • South Africa experienced a sluggish H1, though recovery is expected in H2.

Key financials

  1. India Volume Growth 7% +7%YoY
  2. Food Portfolio ARR ₹1,100 Cr
  3. Food Portfolio Growth 12% +12%YoY
  4. Digital-First Portfolio ARR ₹1,000 Cr

What they filed

Q1 FY27: revenue up 22.9%, net profit up 27.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue2,664 2,794 2,730 3,221 3,482 +31%3,537 +27%3,301 +21%3,957 +23%
EBITDA522 533 458 655 560 +7%592 +11%521 +14%819 +25%
Net profit433 406 345 513 432 −0%460 +13%408 +18%652 +27%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • India Business
    7% Volume Growth— Revenue Growth
  • Parachute
    0% Volume Growth60% Pricing Growth
  • Saffola Oils
    0% Volume Growth
  • Value-Added Hair Oils (VAHO)
    150 bps Value Market Share Gain— Mid & Premium Volume Growth9% 2-year CAGR (ex-Shanti Amla)
  • Food Portfolio
    ₹1,100 Cr ARR12% Growth
  • Digital-First Portfolio
    ₹1,000 Cr ARR
  • International Business
    — Growth Momentum

Capital allocation

medium confidence
  • M&A True Elements Acquisition · Integrated

    Integration of True Elements, acquired 100% in September, is a key focus for profitability and break-even.

    Integration and focus on profitability impacted Food portfolio growth this quarter.

    As you know, we got 100% sometime in September. And therefore, our first task is to ensure that we integrate it well and also start our journey towards break even.

Guidance & targets

Volume

  • India Volume Growth Volume · ongoing · High confidence top quartile
    And number two is continue to focus on volume growth, which is equally important. The fact that how do you maintain top quartile volume growth.

    — Saugata Gupta

Revenue

  • Consolidated Revenue Growth Revenue · FY26 · High confidence around 25%
    Supported by pricing growth, we continue to target around 25% consolidated revenue growth this year.

    — Saugata Gupta

  • International Business Constant Currency Growth Revenue · H2 FY26 · High confidence robust double digit
    aim to improve India volume growth and maintain robust double digit constant currency momentum in the overseas business in the second half of the year.

    — Saugata Gupta

  • Digital-First Portfolio ARR Revenue · FY27 · High confidence 2.5x of FY '24 ARR
    We are on track to reach 2.5x of FY '24 ARR in FY '27 in line with our aspiration.

    — Saugata Gupta

  • Total Revenue Revenue · by 2030 · High confidence ₹20,000 crores
    expect to make meaningful progress towards the ambition of reaching Rs. 20,000 crores in revenue by 2030.

    — Saugata Gupta

Profitability

  • Plix EBITDA Margins Profitability · next 2 quarters · Medium confidence mid to high single digits
    In the next 2 quarters, we are hoping that Plix will move to mid to high single digits.

    — Pawan Agrawal

  • Operating Margin Improvement Profitability · next year · High confidence at least 200 bps
    next year, operating margin will definitely see an improvement of at least 200 basis points.

    — Pawan Agrawal

  • Operating Margin Improvement Profitability · inflationary period followed by deflationary year · Medium confidence 250 basis points
    we have been able to increase our operating margin by 250 basis points.

    — Pawan Agrawal

Ad Spend

  • A&P Spend Growth Ad Spend · ongoing · High confidence double digits
    we are very confident we will continue to spend in double digits growth in A&P.

    — Pawan Agrawal

Market context

  • Consolidated EBITDA Growth Profitability · H2 FY26 · High confidence double digit
    As margin pressures ease gradually, we aim to deliver double digit EBITDA growth in the second half.

    — Saugata Gupta

  • Consolidated EBITDA Growth (2-year CAGR) Profitability · 2-year CAGR · High confidence double digit
    one needs to look at a double digit profitability growth over a 2-year CAGR basis which we are pretty confident about.

    — Saugata Gupta

  • Digital-First Portfolio EBITDA Margins Profitability · FY27 · High confidence double digit
    aspire to achieve double digit EBITDA margins in this portfolio by FY '27.

    — Saugata Gupta

What to watch in Q3 FY26

Copra Price Trend

next few quarters, March onwards
Current Down 15% from July 25 highs
Target Settling down, coming down March onwards

Why it matters

Copra prices significantly impact Parachute's profitability and volume growth, and overall gross margins.

Current forecasts and our crop estimate outlook suggest that Copra market is likely to settle down over the course of the next few quarters and start coming down March onwards.

Risks & concerns

  • Hyperinflation in Copra prices

    high

    Unprecedented hyperinflation in Copra prices (60% pricing growth YoY) muted Parachute volumes, but prices have come down 15% from July highs and are expected to settle and decline by March.

    Parachute was muted in volume terms in the context of unprecedented hyperinflation in Copra prices and 60% pricing growth year-on-year basis.

    Management acknowledged

  • GST rate rationalization disruption

    medium

    Transitionary disruption in trade channels due to revised GST rates in September, impacting Q2 volume growth by ~2%, but now stabilized.

    We witnessed steady demand trends during the month of July and August before facing transitionary disruption in trade channels due to the implementation of the revised GST rates in the month of September.

    Management acknowledged

  • Pricing volatility in Saffola oils

    medium

    Saffola oils volumes were flattish amidst elevated pricing environment, but growth is expected to pick up as volatility subsides.

    Saffola oils were flattish in volume terms amidst the prevailing elevated pricing environment. We anticipate growth will gradually pick up over the course of the next few quarters as pricing volatility has subsided.

    Management acknowledged

  • Sluggish performance in South Africa

    low

    South Africa had a sluggish H1, but management is confident of a visible recovery in the second half.

    While South Africa had a sluggish H1, we are certain of a visible recovery in the second half.

    Management acknowledged

  • Flipkart accounting adjustment for Plix

    low

    An accounting adjustment on Flipkart for Plix, where expenses are now reported from revenue, caused some impact on Foods reporting but no material impact on overall Marico numbers.

    it is more of an accounting adjustment where certain part of the expenses is now getting data from the revenue. On a like-to-like basis, there is some impact on the reporting of Foods. But if I were to just extrapolate this to overall company level, there is no significant impact.

    Management downplayed

Q&A highlights

7 direct
Impact and reversal timeline of GST transition Direct
So, we saw some of this impact flowing into first half of October, but it is now more or less stabilized. ... You can take around 2% during Quarter 2.

Clarified the immediate impact of GST changes on Q2 volumes and the expectation for stabilization, indicating no significant positive reversal in Q3.

Asked by Avi from Macquarie

Strategy and profitability for Honey and Soya Chunks Direct
So, we will be a warrior, but not on pricing. We are a challenger. ... The profitability of Honey is decent. There is no reason for concern. ... Soya is primarily a GT initiative. And we are obviously taking steps to ensure that we are not growing aggressively in Soya to ensure we grow profitably.

Provided insight into the competitive positioning and channel strategy for these newer food categories, emphasizing profitable growth over aggressive market share capture.

Asked by Abneesh Roy from Nuvama

Plix profitability and Flipkart accounting adjustment Partial
Plix has a significant chunk of business coming in from Foods and therefore it is more of an accounting adjustment where certain part of the expenses is now getting data from the revenue. On a like-to-like basis, there is some impact on the reporting of Foods. But if I were to just extrapolate this to overall company level, there is no significant impact.

Addressed a specific accounting change on Flipkart impacting Plix's reported revenue, clarifying it's an adjustment rather than a fundamental business issue, but acknowledged a 'like-to-like' impact on Foods reporting.

Asked by Abneesh Roy from Nuvama

Outlook on A&P spend and margin expansion for FY27 Direct
we are very confident we will continue to spend in double digits growth in A&P. ... next year, operating margin will definitely see an improvement of at least 200 basis points.

Provided clear guidance on continued high A&P investment and a specific target for operating margin improvement in the next fiscal year, linking it to easing input costs.

Asked by Mihir Shah from Nomura

Benefits and future phases of Project SETU Direct
Project SETU has enabled range selling, which has directly contributed to a significant improvement in the trajectory of VAHO growth. ... Ultimately, SETU will first reduce the gap between direct and indirect coverage, and secondly, it will help in diversification, range selling, and far more automation.

Detailed the strategic impact of Project SETU on VAHO growth, distribution, and future operational efficiencies, highlighting its role in driving high-margin growth and optimizing resource allocation.

Asked by Mihir Shah from Nomura

VAHO industry growth and Marico's strategy Direct
If I have grown say 16% and gained share, you can derive a number. So, it should be in double digits, a little bit, entering double digits definitely in value. ... we are doing a lot of category management work in OT to drive the saliency of the category, which is leading to premiumization.

Explained the drivers behind the double-digit growth in the VAHO industry, attributing it to Marico's strategic pivot towards premiumization and category building in organized trade, moving away from a previous focus on LUPs.

Asked by Percy Panthaki from IIFL Securities

Foods portfolio growth and margin targets Direct
Firstly, on food, some of the scaled-up businesses should get into a company EBITDA in the next 3-4 years. Our first milestone for digital business is to get into the 10% EBITDA and then sequentially move forward.

Clarified the long-term profitability targets for the Foods portfolio and the phased approach to achieving 10% EBITDA for the digital business, emphasizing a balance between growth and profitability.

Asked by Anand Shah from Axis Capital

Plix personal care hero SKUs and overall potential Direct
proposition, if you look at trends in Western countries, is about hair and skin food. ... deliberately driving a higher personal care because that will ensure profitability and that will also drive traction of growth. ... potential of Plix is infinite relative to any digital brand, given its presence in both Personal Care and Nutraceuticals, it has one of the highest TAMs a digital brand can have.

Provided a detailed strategic vision for Plix's personal care segment, focusing on plant-based hair and skin food, and highlighted the brand's vast potential across multiple nutraceutical areas due to its broad applicability.

Asked by Nihal Mahesh Jham from HSBC

2 min read 6 chapters

Detailed narrative

Q2 FY26 Performance and Operating Environment

Marico's India business delivered a 7% volume growth in Q2 FY26, despite a 2% volume impact in September due to GST rate rationalization. The company noted steady demand in July and August before the disruption. Revenue growth in India reached multi-quarter highs, with over 95% of the business gaining or sustaining market share and over 75% gaining or sustaining penetration. Management expressed optimism for consumption boost from easing inflation, supportive policies, and favorable monsoons.

Core Categories: Parachute and Saffola Oils

Parachute volumes were muted due to unprecedented hyperinflation in Copra prices, which saw a 60% pricing growth year-on-year. Copra prices have since declined 15% from July 2025 highs and are expected to settle and decline further by March 2026. Saffola oils also experienced flattish volume growth amidst elevated pricing, but growth is anticipated to pick up as pricing volatility subsides. The company passed on GST benefits through price cuts or grammage increases in relevant categories.

Value-Added Hair Oils (VAHO) and Project SETU

Value-added hair oils (VAHO) accelerated its growth trajectory, gaining 150 bps in value market share on a MAT basis, with mid and premium segments showing double-digit volume growth. Project SETU has been instrumental in this growth, enabling range selling and contributing to the high-margin segment of VAHO. Future phases of SETU aim to reduce direct/indirect coverage gaps, diversify business in the South, bridge rural/urban market share gaps for Parachute, and expand presence in urban channels like food, chemist, and cosmetic outlets.

Food and Digital-First Portfolios

The Food portfolio crossed ₹1,100 crore ARR and grew 12% this quarter, driven by Saffola Oats, Honey, Soya Chunks, True Elements, and Plix Nutraceuticals. However, growth was temporarily impacted by the last year of True Elements' earn-out, Flipkart accounting adjustments for Plix, and a strategic focus on Plix profitability. The digital-first portfolio, including Beardo and Plix, exited the quarter with an ARR of over ₹1,000 crores, targeting 2.5x of FY24 ARR by FY27 and double-digit EBITDA margins by FY27. Plix is specifically targeting mid to high single-digit EBITDA margins in the next two quarters.

International Business Performance

The international business maintained robust performance, with Bangladesh exceeding expectations and Vietnam showing signs of recovery. MENA continued its accelerated growth path. While South Africa experienced a sluggish H1, management expects a visible recovery in the second half. The company aims to maintain robust double-digit constant currency momentum in its overseas business in H2 FY26.

Margin Outlook and Strategic Priorities

Marico expects gross margins to improve from their bottomed-out levels. The company anticipates an operating margin improvement of at least 200 basis points next year and aims for double-digit EBITDA growth in H2 FY26. A&P spending will continue to grow in double digits. The long-term ambition is to reach ₹20,000 crores in revenue by 2030, driven by strategic priorities including improving India volume growth, maintaining international business momentum, and focusing on profitable growth in new portfolios.

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