Marico Ltd, known for its popular brands like Parachute and Saffola, has set ambitious revenue targets, aiming for ₹15,000 crore by FY27 and ₹20,000 crore by FY30. The company's strategy emphasizes premiumization, the growth of packaged foods, and a strong digital presence to drive its next phase of growth.
According to managing director Saugata Gupta, Marico has identified multiple growth vectors but acknowledges that not all will perform optimally every year. The company recently reported a 9.3% increase in consolidated net profit for FY26, reaching ₹1,813 crore, while consolidated revenue from operations surged by 26% to ₹13,611 crore.
Volume Growth Insights
Marico's volume growth in India reached an impressive 8% in FY26, marking a seven-year high, with a 9% increase noted in the January-March period. This growth aligns with trends seen among competitors, such as Hindustan Unilever and AWL Agri Business.
Gupta attributes this uptick in consumption to various factors, including low food inflation, which encourages consumers to spend more on FMCG products, often opting for premium brands. Additionally, recent GST rate cuts have made branded products more affordable, further driving this shift.
Focus on Premiumization
The company is actively premiumizing its product offerings, particularly in value-added hair oils and premium skincare brands like Kaya and Plix. Amid rising input costs, Marico has implemented price hikes averaging around 7% across certain segments to maintain profitability.
Despite challenges from high crude oil prices, Gupta expressed confidence that larger companies like Marico are better equipped to handle market volatility compared to smaller players.
Expansion in Food Segment
Marico's food segment, featuring brands such as Saffola and True Elements, is positioned as a key growth driver. The company's food business has quadrupled from FY20 to FY24, with plans to expand the category 15-fold by FY30. Gupta highlighted the increasing consumer focus on wellness, particularly in the packaged food sector, and announced plans to introduce nutraceuticals in the near future.
International Growth Opportunities
Marico's international business also shows promise, reporting a 20% growth in constant currency terms for FY26, the highest in 14 years. The company aims to diversify its international operations beyond Bangladesh, which currently accounts for 45% of its international revenue. Markets like Vietnam are being explored for digital expansion, with significant e-commerce and social commerce opportunities.
Analysts' Outlook
Market analysts are optimistic about Marico's growth strategy, with a majority of analysts recommending a “buy” or “strongly buy” rating for the stock. They believe that the company's focus on diversifying revenue streams and expanding its total addressable market will support its premium valuation.
Marico's earnings have aligned with market expectations, and its stock saw a slight increase following the announcement, reflecting overall market trends.
