Marico shares gains 6% after company reports healthy Q1FY25 business update

In its Q1 business updates, released on July 5, Marico said that the year started on a positive note for the company and demand trends continued to exhibit gradual improvement, in line with its expectations.

Marico informed the stock exchanges that its consolidated revenue grew in high single digits, despite the impact of price cuts in the Saffola Oils portfolio and currency headwinds in the overseas markets. The company expects its consolidated revenue growth to move upwards during the remaining three quarters of the fiscal due to anticipated improvement in the trajectory of domestic volume growth and higher realisations because of a favourable pricing cycle in key domestic portfolios.

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According to the release, Marico’s domestic business witnessed a modest increase in its underlying volume growth sequentially in the first quarter of FY25.

Marico posted single-digit volume growth in Parachute Coconut Oil in the June quarter. However, the company believes the volume growth is likely to pick up through the rest of the year due to consistently healthy trends in off-take growth.

Saffola Oils posted mid-single-digit volume growth due to stability in input and consumer pricing. Marico said that Value-Added Hair Oils(VAHO) had a ‘soft start’ because of competition at the bottom of the pyramid segment. On the other hand, the company’s mid- and premium-segment VAHO products fared better. The edible oils company mentioned in the release that it expects its portfolio to revert to growth from the second quarter of FY25.

Foods and Digital-first brands continued to have robust momentum in the June quarter and scaled up beyond expectations. The company’s international business also posted double-digit constant currency growth on the back of resilient and broad-based growth across markets.

According to the company, among the key input goods for manufacturing the product range, the prices of copra stayed in line with forecasts. On the other hand, input prices of edible oil and crude oil derivatives remained rangebound. Marico expects gross margins to expand on a year-on-year basis due to a favourable portfolio mix.

Positive Management Commentary

Marico’s management said that it will adequately invest in brand building to continually strengthen the company’s long-term equity of core and new franchises. The company expects its operating profit to grow slightly more than its revenue which in turn is expected to lead to a marginal inching up of operating margin on a year-on-year basis.

In a separate filing made on July 5, Marico said that its Board of Directors will meet on Monday, August 5, to consider and approve the financial results for the June quarter of FY25.

Shares of Marico traded at ₹642.1 apiece, up 4.36%, on the NSE at 2:00 pm.