MARICONSEQ4FY25May 9, 2025

Marico Limited

9,709words

87turns

11analyst exchanges

2executives

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Management on call

Saugata Gupta

MD & CEO, MARICO LIMITED

Pawan Agrawal

GROUP CFO & CEO –

Key numbers — 40 extracted

95%

businesses, which furthered the diversification agenda. Offtakes remained healthy with more than 95% of the Regd. Off: 7th Floor, Grande Palladium, 175, CST Road, Kalina, Santa Cruz (East), Mumbai –

80%

: Official portfolio gaining or maintaining market share and more than 80% sustaining or improving penetration on a MAT basis. While alternate channels gained salience part

s to ensure sustainable outlet expansion across markets. Quick commerce has rapidly scaled up to ~3% of the India business, where we are building assortment across categories to effectively capitali

70 bps

evenue growth was in the twenties, aided by pricing. Parachute maintained its stronghold gaining ~70 bps market share on MAT basis. Given the extended firmness in copra prices due to lower arrival in th

rs,

r more competitive. We are already seeing first signs of supply chain disruption among local players, as well as competition taking significant price increases and reducing BTL. All these will be a ta

120 bps

hile undertaking focused interventions in the bottom of pyramid segment. The franchise has gained 120 bps in value market share. We are confident of sustaining the improving growth trajectory through nex

44%

nformation classification: Official Foods delivered robust value growth of 44% YoY in Q4 and 30%+ growth in FY25, surpassing the ₹900 crore mark in annual revenues. The oats fr

30%

ication: Official Foods delivered robust value growth of 44% YoY in Q4 and 30%+ growth in FY25, surpassing the ₹900 crore mark in annual revenues. The oats franchise has grown

₹900 crore

Foods delivered robust value growth of 44% YoY in Q4 and 30%+ growth in FY25, surpassing the ₹900 crore mark in annual revenues. The oats franchise has grown double digits in FY25. While the core Foods

trition portfolio of Plix maintained accelerated growth momentum. 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 s

25%

accelerated growth momentum. 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 pr

o 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. Premium Personal

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Guidance — 20 items

Saugata Gupta

opening

“With FY25, having come to a close, I would like to begin by sharing a quick overview on the operating environment during the quarter gone by, after which I'll touch upon our performance and strategic objectives for the year ahead.”

Saugata Gupta

opening

“We are making concerted efforts to revive GT through Project SETU, which is progressing well.”

Saugata Gupta

opening

“As prices move from the current hyperinflationary zone to a moderately inflationary zone in Q2, which should be the case for most of the year, we expect volume growth to pick up.”

Saugata Gupta

opening

“All these will be a tailwinds for the brand for volume growth to pick up sometime in Q2.”

Saugata Gupta

opening

“While revenue growth in the coming year will be aided by pricing to some degree, we expect volumes to be steady as long as vegetable oil prices remain stable.”

Saugata Gupta

opening

“We are confident of sustaining the improving growth trajectory through next year, backed by continued innovation, ATL investments, and focused brand activation.”

Saugata Gupta

opening

“Email: investor@marico.com Marico Information classification: Official Foods delivered robust value growth of 44% YoY in Q4 and 30%+ growth in FY25, surpassing the ₹900 crore mark in annual revenues.”

Saugata Gupta

opening

“The oats franchise has grown double digits in FY25.”

Saugata Gupta

opening

“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

opening

“The Digital-first portfolio exited FY25 at ₹750 crores ARR, much ahead of aspirations.”

Risks & concerns — 15 flagged

Margins for most players were under pressure due to input cost pressures.

— Saugata Gupta

Adjusting for the impact of ml-age reductions, the brand recorded low single-digit volume growth in Q4.

— Saugata Gupta

In India, core category growth was subdued in FY25, but we expect a gradual pick up through FY26, aided by improving consumption sentiment across urban and rural, and easing of hyperinflation pressure across key commodities.

— Saugata Gupta

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.

— Pawan Agrawal

While there could be some pressure on margin on account of that in the next one or two quarters, we expect margin pressure to ease out starting end of quarter two.

— Pawan Agrawal

But yes, for the next one quarter, margins will be under pressure.

— Pawan Agrawal

Just an understanding or is that a risk?

— Avi

Basically what I'm trying to appreciate is while I get the point of copra deflation not panning out, my only concern was, are you not worried about deflation and Saffola pricing hurting our ability to reach double-digit growth in FY26.

— Avi

The first impact of SETU will happen in terms of the quality of distribution in rural.

— Saugata Gupta

One, for the small players, because of the high cost of procuring copra and the fact that they are risk averse in buying copra, because if the copra prices go down, they'll be stuck with that.

— Saugata Gupta

As a result, what happens is that the stock pressure reduces.

— Saugata Gupta

I think, Karthik, you're referring to the segmental results that we have published, over there you would see a marginal decline in EBIT.

— Pawan Agrawal

So starting from last year quarter one, if you look at quarter 4 results, we have taken about 23% price increase, 22% value increase and a 1% decline in volume, so that's 23% price increase.

— Pawan Agrawal

And one is weight management, one is cardiovascular health, diabetes, gut health, bone health, stress and sleep.

— Saugata Gupta

Sir, one question I have on GT channel it has been under pressure for quite some time, and you alluded you to some of the steps taken to pressure apart from our SETU initiative, could you tell us what are the states which we have taken?

— Anurag Dayal

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Q&A — 11 exchanges

Congrats on a great set of numbers. So firstly, on copra, copra has remained firm longer than expected. On gross margins, I hear you take another price increase in Parachute leading to 30% pricing and you're not seeing any volume backlash because of that. That's great news. But on gross margins, how should one think about that going forward? And when should one expect gross margins to start showing improvement or the pricing that you've taken to tide over the inflation, and we can start seeing gross margins to sequentially improve from here on? And for FY26, any level of gross margin that you

Pawan Agrawal

Yes. 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. And just to give you a sense on copra prices, typically, copra has 18-to-24-month cycle, and this cycle has lasted longer. The reason being the Northeast rains were not great leading to lower crop availability. But we are hoping to start witnessing some softening by the end of the first quarter. While there could be some pressure on margin on accoun

I just wanted to ask two questions. First, on the expectation that we have of driving or aspiration of driving double-digit value growth in FY26 in India. Could you share your thoughts on what have you built in from an oil price perspective, especially given the recent correction in palm oil? Just an understanding or is that a risk? Basically what I'm trying to appreciate is while I get the point of copra deflation not panning out, my only concern was, are you not worried about deflation and Saffola pricing hurting our ability to reach double-digit growth in FY26. And what makes us confidence

Pawan Agrawal

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. So if you do the math around these 3, you'll arrive at that double-digit top line growth which is fairly possible

I just had two questions. One was specifically on this quarter, Foods growth at 44%, it has come off on a pretty good base. Actually, the base growth was also over 20%, so this is the highest growth quarter for us in the year for Foods. So I just wanted to get a sense of anything incremental that we've seen in Q4, whether it's been a little higher on distribution or certain brands or in the portfolio which have done incrementally better because this number is higher than what we've seen probably in the last 8, 10 quarters. So just wanted to get your sense on that. Regd. Off: 7th Floor, Grande

Saugata Gupta

No, it's a combination of three elements. One is our core Foods that we said that has grown in double digit in the full year. Additionally, there are True Elements and Plix. All the three are driving the growth. And as I said, that obviously 44% may be a number which is slightly higher than our aspiration for the full year. But I think one of the other things we have done, in the last 2 years, is that we have significantly made efforts to improve the profitability of Foods. Therefore, one of the things we are going to do with improvement in profitability, is that we will be going into GT in a

This is Abneesh Roy. My first question is on the quick-commerce, do you see the bargaining power increasing for you, given new players are expected to enter this. Already you're doing so well with 7% in Foods. So do you expect that now with bargaining power increasing maybe this can even grow faster, given new player’s entry?

Saugata Gupta

So just to clarify, I said 7% for the Foods category as a whole, For us, different brands have different contribution, but for Foods it is higher than BPC. Now coming to bargaining power, so the way we look at any new channel is that you first need to understand the shopper. So I believe the quick com shopper is different from the shopper in a marketplace, is different from a shopper in modern trade and different from a shopper in GT. For example, in quick com, we believe convenience plays a role, impulse categories have a higher throughput in quick commerce. And given the fact that a shopper

Yes. Thank you for the opportunity and congrats on the quarter.

Management

Sure. Is this any better?

Management

Yes, of course, Karthik. Okay, great. Thank you for the opportunity and also congrats on the quarter and also congrats to Saugata on the reappointment. So I have two questions. The first one is, if I were to look at our India P&L for this quarter, the absolute EBIT has actually declined. So despite having about ₹400 crores extra revenue, the EBIT itself hasn’t moved much. So how should I see this and how much of this is, you think, because of raw material inflation impact and how much of this could just be a mix impact? I think, Karthik, you're referring to the segmental results that we have p

Actually, you have very commendably shown about 13% growth in gross profit during the quarter despite all the inflation and the price hikes we have taken. So gross probably something which in core is something very important at this point in time. So my first question was in Project SETU, you said that VAHO would be one of the main beneficiary as on date. Does Regd. Off: 7th Floor, Grande Palladium, 175, CST Road, Kalina, Santa Cruz (East), Mumbai – 400098. CIN: L15140MH1988PLC049208. Email: investor@marico.com Marico Information classification: Official Project SETU improve your presence in u

Saugata Gupta

Yes. Let me give you a perspective, if you look at historically, Parachute strong markets are basically the South and Maharashtra. And value-added hair oil markets are strong in the North. Having said that, I think in strong markets of the South and Maharashtra, especially South, this will help in diversification by putting the second or the third brand in because we have huge distribution already. In the case of some of the under-indexed markets, like in the North such as UP etc., where we are under indexed, there also, we see growth in VAHO. Basically, what it will do is in the South it will

Congratulations on the good performance. A couple of questions. First, on the Foods part of it, just wanted more clarity on where is snacking in the overall scheme of things. Has that also achieved a certain threshold profitability and if it's an important part of the 25% growth that you are targeting or more in the pilot stage and maybe the growth will be beyond FY27 for that segment?

Saugata Gupta

So we continue to be in the pilot stage. I think it's important first to get the GTM right. As you know, snacking is not OT skewed, because if you have to get snacking to scale, we have to get our GT in Foods right. So, when it comes to Saffola Foods growth, there are three key focus areas. First is to continue to invest behind increasing penetration in Oats. We will continue to drive honey, and we want to scale up Muesli, snacking comes next. And of course, as I said that you will see significant some new category entries in True Elements and Plix continues to do well. I believe that nutraceu

Congratulations, Saugata for your reappointment. My first question was with respect to the opening remarks you made that the growth for the listed FMCG companies may not be the right Regd. Off: 7th Floor, Grande Palladium, 175, CST Road, Kalina, Santa Cruz (East), Mumbai – 400098. CIN: L15140MH1988PLC049208. Email: investor@marico.com Marico Information classification: Official way to look at it or not necessarily representative of the overall growth. So just from your perspective, what would be your sense on the growth last year for the overall consumer space?

Saugata Gupta

I cannot give a number. But all I can say is that the D2C and the smaller brands don't get captured and also some of the unlisted companies. Thus it could be a tad higher. That's all I can say. Understood. And second question is very similar to what Nihal just asked on with respect to Beardo getting to double-digit margins. Just from your lens, again, what would be the gestation period? Is it fair to say that the gestation period for a personal care D2C brand is about 5 to 7 years, whereas for Foods it could be much longer? So what would be that number for Foods businesses when we are pursuing

Saugata Gupta

I think we believe that the urban GT will continue to be stressed, because I think if you look at the organized trade share in the top 5, 6 cities, it's increasing, also with growth of quick- commerce, quick-commerce is also taking a slice from GT. Having said that, what we are trying to do is ensure that through a significant number of steps, we want to manage and ensure that our partners continue to get ROI. But I believe there is significant opportunity in GT and it will continue to be very, very critical and a source of competitive advantage. There will continue to be entry barriers in the

Thanks for listening on the call. To conclude, the year has been marked by significantly positive outcomes in each of our strategic objectives, even while the operating environment has been challenging. Despite sharp input cost pressures, our core portfolios have remained steady, and we have sustained investment towards the accelerated scale up of Foods and Premium Personal Care portfolios in India and premium categories in the overseas markets to build high growth levers, which are not only margin accretive, but will also systematically reduce commodity exposure over the time. As a result, we

Management

Speaking time

Saugata Gupta

Moderator

Pawan Agrawal

Karthik Chellappa

Avi

Abneesh Roy

Abhijeet Kundu

Mihir Shah

Nihal Mahesh Jham

Sheela Rathi

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Opening remarks

Saugata Gupta

Good evening to all those who have joined the call, and I hope all of you are doing well. With FY25, having come to a close, I would like to begin by sharing a quick overview on the operating environment during the quarter gone by, after which I'll touch upon our performance and strategic objectives for the year ahead. During the quarter, consumer sentiment remained largely stable, supported by improving rural demand and mixed trends across mass and affluent urban segments. Margins for most players were under pressure due to input cost pressures. Easing retail and food inflation is encouraging for consumption trends going ahead. In addition, a healthy monsoon season, higher MSPs and continued government spending should support the uptrend in rural growth. It is important to note that the growth of listed companies alone does not provide a comprehensive picture of consumption trends, commentary from unlisted players including Indian subsidiaries of multinational corporations, D2C player

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