Marico Q2 Results: Net profit jumps 31% YoY to Rs 550 crore, revenue rises 12%

EBITDA margin expanded 200 basis points to 18.2% from 16.2% in Q2FY26.The company's India business recorded 10% underlying volume growth, while its international business reported 13% constant currency growth (CCG).India revenue increased 10% YoY to Rs 2,916 crore, supported by growth across core franchises and the scale-up of newer businesses. The company said more than 95% of its business gained or sustained market share and penetration on a moving annual total (MAT) basis.Live EventsTraditional and organised trade recorded double-digit growth, while quick commerce continued to accelerate.Marico's gross margin expanded approximately 600 basis points year-on-year, supported by moderation in copra prices and a favourable portfolio mix.

Advertising and promotion (A&P) expenditure increased 44% as the company continued to invest in its brands and growth initiatives.The expansion in gross margin supported a 200-basis-point improvement in EBITDA margin to 18.2%. EBITDA grew 27%, while profit after tax (PAT) increased 31%.Segment-wise performanceParachute Rigids recorded 13% volume growth, its highest in 22 quarters. Revenue increased approximately 1%, reflecting the impact of the anniversary of earlier pricing actions and price reductions undertaken at the beginning of the year to pass on lower copra prices to consumers.The brand gained more than 570 basis points in market share to reach a new high of 60% volume market share.Value-Added Hair Oils registered 21% value growth, marking its sixth consecutive quarter of growth.

The portfolio gained 80 basis points in value market share on a MAT basis. Marico attributed the performance to innovation across mid- and premium-segment products, its Project SETU distribution transformation and brand investments. Almond Hair Oils continued to record accelerating growth.Saffola Edible Oils reported 6% revenue growth, despite a high-single-digit decline in volumes. The premium range continued to outperform the overall portfolio, led by cold-pressed oils.The company said it was rationalising the supply of select variants as part of a structural reset aimed at improving the franchise's long-term profitability.

It also passed on the benefit of reduced import duties on vegetable oils to consumers through pricing actions towards the end of the quarter.The Foods portfolio grew 45%, crossing an annualised revenue run rate of Rs 1,500 crore. Marico said improvements in unit economics and a favourable product mix also supported profitability.The Saffola Foods portfolio recorded early-teens growth, led by Oats, Muesli and Soya Chunks.

Saffola Oats retained its leadership position in the oats category.True Elements, 4700BC and Cosmix continued to scale up, with the company reporting sequential acceleration in their growth. Marico also continued to expand its product portfolio through new launches and entry into adjacent categories.Premium Personal Care, including digital-first brands, maintained its growth momentum, led by Beardo, Livon Serums and Parachute Advansed Protein Shampoo.The portfolio, which includes premium hair nourishment, hair cleansing, male grooming and skincare, crossed an annualised revenue run rate of Rs 500 crore.

The digital-first portfolio reported an annualised revenue run rate of approximately Rs 1,150 crore.International business grows 13% in constant currencyMarico's international business reported 13% constant currency growth and 23% revenue growth in rupee terms during the quarter.Bangladesh recorded 5% CCG, marking a marginal sequential improvement despite subdued consumer demand amid persistent high inflation and a high base.

The company expects growth to gradually improve in subsequent quarters.Vietnam continued its growth momentum, delivering 22% CCG, supported by broad-based portfolio growth and accelerating e-commerce sales.The Middle East and North Africa (MENA) business reported 15% CCG, supported by resilient performance in the Gulf markets. South Africa and the NCD and Exports business recorded CCG growth of 15% and 17%, respectively.Among key input costs, copra prices remained range-bound during the quarter at around 35% below their peak levels last year.

Crude-linked derivatives and vegetable oil prices, however, continued to inflate amid geopolitical developments and weather-related concerns.OutlookMarico said demand trends remained resilient during the quarter despite a volatile operating environment. The company said it remained optimistic about consumption trends while continuing to monitor inflationary and geopolitical developments. Based on its first-half performance, the company expects to deliver revenue growth in the teens during FY27 and comfortably cross the Rs 15,000 crore revenue mark.

It also expects EBITDA growth in the mid-twenties during the financial year.Marico expects its India business to deliver double-digit volume growth, while its international business is expected to see accelerating constant currency growth in the second half of FY27. Under its Vision 2030 strategy, the company aims to strengthen its core franchises, expand into adjacent categories, scale its digital businesses profitably and diversify its international growth operations.At the consolidated level, Marico aspires to achieve revenue of Rs 20,000 crore with a mid-teens EBITDA compound annual growth rate (CAGR).The company is also targeting a shift towards premium and more profitable categories, with a focus on reducing the share of commodity-linked businesses.Marico aims to increase the contribution of its Foods and Premium Personal Care portfolios, including digital-first businesses, to approximately 27% of India revenue by the end of FY27 and 33% by FY30.It expects its digital-first businesses to achieve double-digit EBITDA margins by the end of FY27 and expand margins further into the teens over the medium term.

The company is also targeting a premiumisation of its international portfolio. The share of premium categories in international revenue increased from approximately 20% in FY20 to 30% in FY26, and is expected to reach 40% by FY30.Marico expects the share of international revenue contributed by markets outside Bangladesh to increase from approximately 55% in FY26 to 65% by FY30, compared with around 50% in FY20.The company also announced Project SETU 2.0, the next phase of its distribution transformation initiative.

The programme will focus on AI-led capabilities for assortment selling, sales-force enablement and store execution, alongside a dedicated go-to-market strategy for Foods and Premium Personal Care.Marico said the SETU model had already been extended internationally, with encouraging results in Vietnam and an early-stage rollout in Bangladesh.Marico share priceAhead of the Q2 results announcement, Marico shares settled nearly flat on the NSE at Rs 800 apiece, down 0.18% from the previous closing price.Disclosure: This article has been written by Kumar Gaurav, who is not a Sebi-registered Research Analyst or an Investment Adviser.

Gaurav and their ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective Sebi-registered Research Analyst/brokerage and have been reproduced/reported with due attribution.

They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here(You can now subscribe to our ETMarkets WhatsApp channel)