Marico Sees Recovery Signs, But Volume Growth Remains Muted
FMCG major Marico reported modest signs of recovery in its Q3 FY24 results, though overall performance remained underwhelming due to tepid demand and ongoing margin pressures. Consolidated revenue remained flat year-on-year at ₹2,422 crore, missing analysts’ expectations, highlighting persistent volume challenges in key product categories.
One of the most pressing issues was the underperformance of Marico’s cornerstone brand, Parachute coconut oil. The brand saw a volume decline of 3% year-on-year, reflecting weak rural consumption and subdued demand. However, strong traction in newer portfolios and premium personal care products helped offset the shortfall to some extent.
Marico’s profitability improved, with gross margin rising by 530 basis points year-on-year, aided by easing input costs—particularly for copra. Operating margin also expanded by 350 basis points to 19.6%, fueling a 17% year-on-year growth in consolidated net profit to ₹386 crore.
The domestic business reported a slight volume growth of 2%—a sequential improvement—but signs of a robust recovery in rural demand remain limited. Historically a growth driver, rural markets are still under pressure from inflationary conditions and lackluster consumer sentiment.
On the other hand, the company’s food portfolio, led by Saffola, continued to perform well. The premium food segment posted steady gains, supported by portfolio expansion and growing health-conscious consumer trends. International business also delivered double-digit constant currency growth, with strong contributions from Bangladesh and the MENA region.
Looking ahead, Marico has retained its guidance of delivering low to mid-single-digit volume growth in the domestic business for the second half of FY24, with an expectation of improved sentiment and seasonal tailwinds in Q4. The company also aims to sustain operating margins at 20% for FY24, reflecting continued focus on premiumisation and cost rationalisation.
For FMCG stakeholders, Marico’s report signals a cautious recovery, with clear headwinds in rural demand but positive momentum in urban premium segments and international operations. Continued margin expansion and diversified growth levers could provide resilience in a sluggish consumption environment.