Marico Faces a Test as Costs Rise

Marico Ltd has held up better than its FMCG peers amid muted urban demand. While Nifty FMCG index has dropped 19% over the past six months, Marico's stock declined by just 6%, showing its relative resilience.

- Manvi Agarwal

The company's stronghold in Parachute coconut oil and Saffola edible oils, along with steady growth in newer categories like personal care and foods, has been a solid cushion.

"Notably, Marico has been one of the most resilient companies witnessing consistent improvement in volume growth during FY25 despite price hikes," Antique Stock Broking said. The brokerage said that cumulative price hikes on Parachute and Saffola edible oils is at 15% and 20%.

After its Q3FY25 results, Marico saw relatively smaller earnings estimate cuts than peers. The firm's consolidated revenue rose 15% year-on-year to 2,794 crore in Q3, but Ebitda margin contracted 210 basis points to 19%.

However, while revenue growth momentum could sustain in Q4, weak profit margins are a concern. Prices of copra, a key raw material, remain high, forcing Marico to implement significant price hikes. This could pinch volumes, and growth can stay sluggish until a meaningful recovery.