Earnings Outlook
High input cost to hurt Marico's profitability in Apr-Jun
This story was originally published at 09:41 IST on 4 August 2025
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By Simran Rede
MUMBAI – A sharp rise in prices of key raw materials is likely to take a toll on the June quarter earnings of Marico Ltd. The company is expected to report an on-year rise in its revenue, but higher prices of commodities such as copra and edible oil are seen contracting the company's margins. The fast-moving consumer goods company is expected to report higher on-year numbers for the June quarter, but sequentially, the company is likely to post a weaker performance.
Marico's consolidated net profit is expected to rise over 6% on year to INR 3.38 billion for the June quarter, according to the average of estimates from 15 brokerages. On other hand, Marico's bottomline is likely to post an over 15% decline on a sequential basis. The highest estimate of INR 3.91 billion for consolidated net profit is from Morgan Stanley and the lowest estimate of INR 3.03 billion is from Elara Securities (India) Pvt. Ltd.
The company is expected to report a consolidated revenue of INR 26.30 billion for the quarter, up over 15% on year. Sequentially, the company's consolidated revenue is expected to fall nearly 6%. Equirus Securities Pvt. Ltd. has the highest estimate for consolidated revenue at INR 26.93 billion and the lowest estimate of INR 22.78 billion is from HDFC Securities Ltd.
Brokerages predict the company's revenue to grow on the back of price hikes taken to offset unprecedented rise in copra prices. This top-line growth is also driven largely by pricing in categories such as coconut oil, edible oil, tea, salt, and biscuits, according to analysts.
The company's consolidated earnings before interest, taxes, depreciation, and amortisation are expected to be INR 4.64 billion for the quarter, according to the average of 13 brokerages. Morgan Stanley has the highest estimate for consolidated EBITDA at INR 5.21 billion and the lowest estimate of INR 4.42 billion is from HDFC Securities Ltd.
Marico's EBITDA margins are likely to remain under pressure given a 50-80% on-year rise in copra prices. The EBITDA margin is expected to contract 359-490 basis points on year to 19.0-20.1%, according to three broking firms. The gross margin is also likely to fall over 100-450 bps on year to around 47.8-51.3% in the reporting quarter.
Marico's domestic volume growth for the quarter is broadly expected to improve, with most brokerages estimating a year-on-year rise in the range of 7.0–8.5%, marking a multi-quarter high. The uptick is anticipated to be led by strong traction in food and digital segments and a recovery in value-added hair oils, even as growth in Parachute Core and Saffola Edible Oils may remain muted. While Emkay Global Financial Services expects supply rationalisation in hair oil to result in a 4% decline in volume, others see the company benefiting from recent price cuts, leading to mid-single-digit growth. Overall, the India business is likely to post a sequential improvement in underlying volumes.
The Saffola Edible Oils segment is expected to post a robust 25% year-on-year growth in the June quarter, largely driven by pricing, as the company passed on government-led duty cuts through consumer promotions. The brand is seen sustaining its strong momentum in growth, with the Saffola oils category projected to grow in the high twenties. Meanwhile, the company's foods portfolio is likely to maintain over 30% growth, supported by more than 20% growth within the Saffola foods segment alone.
Parachute has faced slight volume pressure due to inflation in input costs and changes in pack sizes. The brand has taken cumulative price hikes of around 30% over the past few quarters to partially offset a sharp, more than 50% increase in copra prices. As a result, value growth is seen up 33%, even as a 1% on-year decline in volume in the June quarter.
Marico's international business is expected to deliver strong performance, with constant currency growth projected in the range of 12–15% on year, slightly moderating from 16% in the March quarter but improving from 10% in the corresponding quarter of 2024-25 (Apr-Mar). Some brokerages anticipate constant currency growth in the high teens, highlighting continued strength across key international markets.
The FMCG company will declare its Apr-Jun financial results Monday. At 0927 IST, shares of Marico traded at INR 712.05 on the National Stock Exchange, up 0.1%. The stock has risen nearly 2% since it detailed its March quarter earnings. During the previous quarter, the company had reported a consolidated net profit of INR 3.34 billion compared to INR 3.18 billion in the year-ago quarter, and its revenue had fallen over 2% on year to INR 27.30 billion.
Following are the Apr-Jun earnings estimates of Marico based on reports from 15 brokerage houses in descending order by the estimate of net profit.
Brokerage firm | Net sales(in INR million) | Net profit(in INR million) | EBITDA(in INR million) |
Morgan stanley | 25,570.00 | 3,911.00 | 5,209.00 |
PhillipCapital (India) Pvt Ltd | 26,653.00 | 3,491.00 | 4,667.00 |
Motilal Oswal Financial Services Ltd | 26,821.00 | 3,441.00 | 4,749.00 |
IIFL Capital Services Ltd | 26,208.00 | 3,436.00 | 4,777.00 |
Kotak Institutional Equities | 26,661.00 | 3,421.00 | 4,658.00 |
Anand Rathi Share and Stock Brokers Ltd | 26,653.00 | 3,401.00 | NA |
Sharekhan Ltd | 26,610.00 | 3,400.00 | NA |
JM Financial Institutional Securities Pvt Ltd | 26,649.00 | 3,398.00 | 4,621.00 |
Nirmal Bang Equities Pvt Ltd | 26,888.00 | 3,339.00 | 4,589.00 |
Systematix Shares and Stocks (India) Ltd | 26,643.00 | 3,312.00 | 4,468.00 |
Nuvama Wealth Management Ltd | 26,534.00 | 3,311.00 | 4,551.00 |
Prabhudas Lilladher Pvt Ltd | 26,502.00 | 3,294.00 | 4,551.00 |
Equirus Securities Pvt Ltd | 26,928.00 | 3,291.00 | 4,623.00 |
HDFC Securities Ltd | 22,780.00 | 3,180.00 | 4,420.00 |
Elara Securities (India) Pvt Ltd | 26,350.00 | 3,028.00 | 4,498.00 |
Average | 26,296.67 | 3,376.93 | 4,644.69 |
End
Edited by Akul Nishant Akhoury
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