Marico’s Rural Rocket: Multi-Quarter Highs and Margin Mysteries Set Stage for a Thrilling FY25

Robust Revenue and Profit Growth:

Marico reported a 20% year-on-year rise in Q4 FY25 revenue to ₹2,730 crore, with consolidated Profit After Tax (PAT) up 8% to ₹343 crore. For the full FY25, revenue grew 12% to ₹10,831 crore, and PAT increased 8% to ₹1,593 crore. In Q1 FY25, revenue grew 7% YoY to ₹2,643 crore, with PAT rising 9% to ₹464 crore.

 

India Business Hits Multi-Quarter High:

Underlying volume growth in India reached a 14-quarter high in Q4, supported by a 7% increase, while Q1 saw 4% volume growth. This was driven by improving rural demand and steady urban sentiment, with rural markets showing more promise and urban trends remaining stable.

 

Margin Pressures from Input Cost Inflation:

Despite strong topline growth, gross margins contracted by about 300 basis points in Q4, mainly due to higher copra and vegetable oil prices. The company responded with calibrated price hikes and increased advertising & promotional (A&P) spends, which rose 35% YoY in Q4 and 13% in Q1. EBITDA margin in Q4 dropped to 16.8% from 19.4% a year ago, while Q1 saw a slight improvement to 23.7%.

 

Strategic Focus on Premiumization:

Premium personal care and food segments outpaced mass categories, with premium personal care revenues growing at a 24% CAGR over FY21–25 and now contributing 29% of overall revenues. Marico aims to sustain this momentum through innovation and market expansion.

 

International Business Diversification:

International operations delivered 16% constant currency growth in Q4 and 10% in Q1, with Bangladesh remaining resilient and incremental growth from MENA and South Africa.

 

Outlook and Guidance:

Marico expects gross margin pressures to ease from the second half of FY25, supported by moderating input costs, a favorable monsoon, and easing inflation. The company anticipates a gradual improvement in operating profit growth and overall consumption sentiment in the coming quarters.

 

Dividend and Share Performance:

The board recommended a final dividend of ₹7 per share for FY25. Marico’s stock has delivered a one-year return of nearly 39% and a five-year return of 148%, reflecting strong fundamentals and investor confidence.

 

Sources: Univest, Angel One, Business Standard