Marico Limited — Q4 FY25 earnings call

Call held 2 May 2025

Management summary

Marico delivered strong Q4 FY25 results with double-digit consolidated revenue growth, driven by robust performance in Foods and the Digital-first portfolio. While core categories in India faced headwinds from input cost inflation and subdued demand, the company maintained aggressive A&P investments for future growth and expects a gradual recovery in FY26. International business also showed resilient double-digit growth, and the company remains confident in its strategy to achieve double-digit revenue and operating profit growth in the coming year.

Highlights

  • Consolidated revenue growth was double-digit for FY25, supported by improving volume growth trajectory in India and broad-based growth overseas.

  • Foods portfolio achieved robust value growth of 44% YoY in Q4 and 30%+ in FY25, reaching ₹900 crore annual revenue, with a target to reach 8x FY20 scale in the medium term.

  • Digital-first portfolio exceeded aspirations, exiting FY25 at ₹750 crores ARR, with Beardo and Plix expected to cross ₹1,000 crores combined ARR this year and achieve double-digit EBITDA margin by FY27.

  • International business maintained strong double-digit constant currency growth in Q4 and FY25, with Bangladesh and South Africa performing well and MENA progressing steadily.

  • Aggressive A&P investment (up 18% in FY25) was maintained to strengthen core franchises and accelerate diversification, without sacrificing future growth for short-term margins.

Concerns

  • Copra prices remained firm longer than expected, leading to margin pressure for the next quarter.

  • Core category growth in India was subdued in FY25, though a gradual pick-up is expected in FY26.

  • Urban General Trade (GT) continues to be stressed due to increasing share of organized trade and quick-commerce.

  • Just Herbs and True Elements are not yet at breakeven, though expected within 18-24 months.

Key financials

3 periods

Headline

  • India Volume Growth
    7%
  • Foods Value Growth
    44%

Q4

  • Gross Profit Growth
    13%

FY25

  • India Volume Growth
    5%
  • Foods Annual Revenue
    ₹900 Cr
  • Digital-first Portfolio Exit ARR
    ₹750 Cr
  • Consolidated Operating Margin
    19.9%
  • A&P Spend Growth
    18%

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

  • Foods
    44% Value Growth (Q4)30% Value Growth (FY25)₹900 Cr Annual Revenue (FY25)1,000 bps Gross Margins Expansion (FY24-FY25 cumulative)
  • Digital-first Portfolio
    ₹750 Cr Exit ARR (FY25)₹100 Cr Just Herbs Revenue (FY25)9% Plix EBITDA Margin (FY25)
  • International Business
    10% Constant Currency Growth (Q4)10% Constant Currency Growth (FY25)29% Premium Business Revenue Share (FY25)20% Premium Business Revenue Share (FY21)

Capital allocation

high confidence
  • M&A Beardo Acquisition · Integrated

    Scaled ~4x since FY21, reached near double-digit EBITDA margin.

    Expected to cross ₹1,000 crores combined ARR with Plix this year with focus on operating profitability.

    Beardo has scaled ~4x since FY21 and has reached near double-digit EBITDA margin.
  • M&A Plix Acquisition · Integrated

    Gaining visible traction, delivered single-digit EBITDA margin in FY25.

    Expected to cross ₹1,000 crores combined ARR with Beardo this year with focus on operating profitability.

    Plix has delivered single-digit EBITDA margin this year.
  • M&A Just Herbs Acquisition · Integrated

    Crossed ₹100 crores revenue mark in FY25.

    Not yet at breakeven, focus on sustainable 20-25% growth and breakeven over next 18-24 months.

    Just Herbs crossed 100 crores revenue mark in FY25.
  • M&A True Elements Acquisition · Integrated

    Maintained accelerated growth momentum.

    Not yet at breakeven, focus on sustainable 20-25% growth and breakeven over next 18-24 months.

    Furthermore, True Elements and the plant-based nutrition portfolio of Plix maintained accelerated growth momentum.
  • Liquidity Liquidity disclosed Surplus cash on the balance sheet is being returned to shareholders, indicating strong liquidity.
    Surplus cash lying on the balance sheet, and it is only prudent to return it back to the shareholders rather earning interest income on that.

Guidance & targets

Foods

  • Foods Portfolio Growth Foods · medium term · High confidence 25%+
    The Foods portfolio has reached 5x of the FY20 scale, and we expect 25%+ growth over the medium term to reach about 8x of the FY20 scale, while we continue to improve profitability in the category.

    — Saugata Gupta

  • Foods Portfolio Growth Foods · next 2, 3 years · High confidence 20% to 25% plus
    Having said that, I think as long as I think we will be happy if we can deliver 20% to 25% plus growth in Foods over the next 2, 3 years.

    — Saugata Gupta

Digital-first Portfolio

  • Exit ARR Digital-first Portfolio · FY27 · High confidence 2.5x of FY24 ARR

    Previously 2x → 2.5x of FY24 ARR

    We now expect this exit ARR to be 2.5x of FY24 ARR in FY27, up from the previous target of 2x.

    — Saugata Gupta

  • Beardo & Plix Combined ARR Digital-first Portfolio · this year (FY26) · High confidence ₹1,000 crores plus
    We expect these two brands to cross ₹1,000 crores in combined ARR this year with a clear focus on driving operating profitability with scale.

    — Saugata Gupta

  • Just Herbs & True Elements Breakeven Digital-first Portfolio · next 18 to 24 months · High confidence earliest over next 18 to 24 months
    On the other hand, Just Herbs and True Elements, though not yet at breakeven, will focus on sustainable 20% to 25% growth and leveraging scale and synergy to achieve breakeven at the earliest over the next 18 to 24 months.

    — Saugata Gupta

  • Just Herbs & True Elements Growth Digital-first Portfolio · High confidence 20% to 25%

    — Saugata Gupta

International Business

  • Constant Currency Growth International Business · medium term · High confidence strong double-digit
    We are confident of sustaining strong double-digit constant currency growth in international markets while gradually unlocking the margin upside from scale benefits over the medium term.

    — Saugata Gupta

India Business

  • Volume Growth India Business · next year, full year annualized · High confidence more than 5%, 6-7%
    We expect the volume growth next year, full year annualized, as more than 5%. 6-7% growth has almost become a base case for us.

    — Saugata Gupta

Tax Rate

  • Effective Tax Rate Tax Rate · next few years · High confidence around 22%
    You can take it at around 22%.

    — Pawan Agrawal

Market context

  • Consolidated Revenue Growth Revenue · next year · High confidence double-digit
    Moving into next year, we expect to sustain double-digit revenue growth and will strive to deliver double-digit operating profit growth.

    — Saugata Gupta

  • Operating Profit Growth Profitability · next year · High confidence double-digit
    Moving into next year, we expect to sustain double-digit revenue growth and will strive to deliver double-digit operating profit growth.

    — Saugata Gupta

  • EBITDA Margin Digital-first Portfolio · FY27 · High confidence double-digit
    We continue to see marked improvement in profitability in the Digital-first portfolio and maintain our aspiration to achieve double-digit EBITDA margin by FY '27.

    — Saugata Gupta

What to watch in Q1 FY26

Copra price correction

Q2 FY26
Current Firm, causing margin pressure
Target Softening towards Q2

Why it matters

Copra prices directly impact gross margins for the core Parachute brand.

As far as gross margins are concerned, given the fact that the copra prices have been higher than what we had anticipated, it will remain under pressure for the next one quarter for sure, and then we will see as to how the copra prices behave.

Risks & concerns

  • Copra price firmness and margin pressure

    medium

    Copra prices remained firm longer than expected, leading to margin pressure for the next quarter, with expected softening towards Q2.

    Management acknowledged

  • Subdued core category growth in India

    medium

    Core category growth was subdued in FY25, but a gradual pick-up is expected in FY26 aided by improving sentiment and easing inflation.

    Management acknowledged

  • Urban General Trade (GT) stress

    medium

    Urban GT continues to be stressed due to increasing share of organized trade and quick-commerce, requiring efforts to manage and ensure ROI for partners.

    Management acknowledged

  • Breakeven timeline for Just Herbs and True Elements

    low

    These brands are not yet at breakeven, with a target to achieve it over the next 18-24 months.

    Management acknowledged

Q&A highlights

7 direct
Gross margins outlook and copra prices Direct
As far as gross margins are concerned, given the fact that the copra prices have been higher than what we had anticipated, it will remain under pressure for the next one quarter for sure, and then we will see as to how the copra prices behave.

Addresses the immediate margin outlook for the core business, highlighting continued pressure from input costs but also levers for improvement.

Asked by Mihir Shah

Sustainability of Foods growth Direct
I think there is a huge run rate for growth in Foods, and the reason is that we have not tapped the GT fully for Foods so far. I mean most of our Foods business has been skewed to OT. We are also significantly leveraging quick commerce.

Explains the drivers for continued strong growth in Foods, emphasizing untapped distribution potential in General Trade and quick-commerce.

Asked by Mihir Shah

Double-digit value growth in India for FY26 and impact of palm oil deflation Direct
It is built on 3 different goals. One is our core business, where we definitely expect, first of all, the volume growth trajectory itself to improve. Further, we expect that in the first half of the year, the inflation led growth will definitely support. That's one. Second is Foods, as we just mentioned that we expect Foods to continue to grow at 25% plus. Hence, that's the second build. And third is, of course, the Digital-first businesses, which is growing at a much higher rate.

Clarifies the multi-pronged strategy for achieving double-digit growth in India, including core business volume recovery, Foods, and Digital-first brands, mitigating concerns about commodity price volatility.

Asked by Avi

Impact of Project SETU on VAHO and rural distribution Direct
The first impact of SETU will happen in terms of the quality of distribution in rural. It will help in range selling. It will also help in gaining market share and also drive some of the diversification agenda, like basically, what happens is if it goes through wholesale, wholesale only takes the high-velocity brand or the leader brand.

Details the strategic benefits of Project SETU for improving rural distribution quality, range selling, and market share, particularly for Value-Added Hair Oils (VAHO).

Asked by Avi

Digital-first portfolio strategy for FY26 (stabilizing vs. new M&A) Direct
As I alluded to during my opening commentary, we see two cohorts in the digital business. The first cohort consisting of Beardo and Plix. We expect the ARR to hit ₹1,000 crores plus as far as these two brands are concerned. They are already profitable. We don't need to incur extra cash burn to achieve disproportionate growth, I think will accelerate growth in these two brands.

Outlines the differentiated strategy for the digital portfolio, focusing on scaling profitable brands (Beardo, Plix) and bringing newer ones (Just Herbs, True Elements) to breakeven, rather than immediate new M&A.

Asked by Abneesh Roy

India P&L EBIT decline in Q4 despite revenue growth Partial
I think, Karthik, you're referring to the segmental results that we have published, over there you would see a marginal decline in EBIT. But it also includes the digital. If you were to adjust the digital business bleed, etcetera, EBITDA for quarter four for India business has actually grown by about 4% to 5%.

Clarifies that the reported EBIT decline for India P&L was influenced by the digital business bleed, and core India business EBITDA actually grew, providing a more nuanced view of profitability.

Asked by Karthik Chellappa

Path to profitability for D2C portfolio (Beardo's double-digit margin) Direct
And the second one, which is a calibrated growth of 20% to 30%, but a very high focus on profitability improvement. And latter is what we have adopted as the approach, and we are absolutely comfortable with this, and we will continue to have this approach for the rest of the Digital businesses.

Explains Marico's 'calibrated growth' approach for D2C brands, prioritizing profitability and sustainable growth over explosive, cash-burning expansion, which led to Beardo's double-digit margins.

Asked by Nihal Mahesh Jham

High dividend payout in Bangladesh and its implications Direct
Surplus cash lying on the balance sheet, and it is only prudent to return it back to the shareholders rather earning interest income on that. We are not compromising any investment opportunity, the A&P also continues to grow.

Assures that the high dividend payout in Bangladesh is due to surplus cash and does not indicate limited growth opportunities or compromise on investment in the business.

Asked by Anurag Dayal

3 min read 7 chapters

Detailed narrative

Overall Performance and FY25 Achievements

Marico achieved double-digit consolidated revenue growth for FY25, supported by a 7% volume growth in India in Q4 and 5% for the full year. The company successfully met most strategic objectives set at the start of the year, including broad-based growth in overseas markets and significant traction in diversification journeys. Despite input cost pressures, the consolidated operating margin for FY25 was just shy of 20%, demonstrating resilient bottom-line performance.

India Business: Core Categories and Rural Demand

India's core category growth was subdued in FY25 but is expected to pick up gradually in FY26, driven by improving consumer sentiment and easing hyperinflation. Rural demand showed signs of improvement, supported by a healthy monsoon season and higher MSPs. Parachute experienced muted consumption due to price hikes and ml-age reductions, but maintained its stronghold with ~70 bps market share gain on MAT basis, and volume growth is expected to pick up in Q2 FY26.

Foods Portfolio: Robust Growth and Distribution Expansion

The Foods portfolio delivered robust value growth of 44% YoY in Q4 and 30%+ in FY25, surpassing ₹900 crore in annual revenues for FY25. The company aims for 25%+ growth over the medium term to reach 8x its FY20 scale. Growth is driven by oats, honey, and new launches like Saffola Cuppa Oats, with significant untapped distribution opportunities in General Trade, especially for Muesli and Masala Oats, which are currently skewed to Organized Trade and quick-commerce.

Digital-First Portfolio: Exceeding Aspirations and Profitability Focus

The Digital-first portfolio exited FY25 at ₹750 crores ARR, exceeding its aspirations, and is now targeting 2.5x of FY24 ARR by FY27 (up from the previous 2x target). Beardo and Plix are expected to cross ₹1,000 crores in combined ARR this year and achieve double-digit EBITDA margins by FY27. Newer brands like Just Herbs (₹100 crores revenue in FY25) and True Elements are focused on sustainable 20-25% growth and achieving breakeven within 18-24 months, leveraging scale and synergies.

International Business: Resilient Growth and Premiumization

The International business sustained double-digit constant currency growth in Q4 and FY25. Bangladesh and MENA regions performed well, with consistent share gains and robust NPD. South Africa maintained consistent growth, while Vietnam experienced a slower year. The premium business revenue share in international markets increased from 20% in FY21 to 29% in FY25, driven by innovations and expansions into categories like shampoos, skincare, and baby care.

Margin Management and A&P Investment Strategy

Despite input cost pressures, Marico maintained resilient bottom-line performance, with FY25 consolidated operating margin just shy of 20%. The company increased A&P spends by 35% in Q4 and 18% for FY25, prioritizing long-term category growth and diversification over short-term margin management. Efficiency initiatives, including converting BTL to ATL and leveraging digital media buying capabilities, are expected to optimize A&P effectiveness.

Distribution Strategy: Project SETU and Quick Commerce

Project SETU is underway to improve the quality of direct distribution, particularly in rural areas, to drive range selling and market share for both core and diversified products. Quick commerce has rapidly scaled to ~3% of the India business, and ~7% for Foods, with Marico building assortment across categories to capitalize on this channel. The company aims to create tailor-made portfolios for quick commerce to drive offtake without cannibalization or profit dilution.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Fast Moving Consumer Goods earnings calls