Marico plans to cut the share of its mass, commodity-linked portfolio to 50% by FY30 from 63% in FY26. The company aims to raise the share of its premium portfolio to 50% over the same period, up from 37% currently. The plan was outlined by Marico’s management to Nuvama Institutional Equities in a recent meeting, according to a report by Nuvama.
Nuvama has maintained a ‘Buy’ rating on Marico with an unchanged price target of Rs 1,015. The stock closed at Rs 806 on the day of the note, implying a price-to-earnings multiple of 47 times and 40 times its FY27 and FY28 earnings estimates, respectively.
Marico’s foods, premium personal care and digital-first brands gain share as premiumisation accelerates
The share of foods and premium personal care, including the digital-first portfolio, in Marico’s India revenue is expected to rise to about 27% in FY27. This is higher than the company’s earlier guidance of 25%. The share is projected to touch 33% by FY30, up from 23% in FY26, the report noted.
According to the report, Marico’s foods business grew 43% year-on-year in the first quarter of FY27, crossing an annualised revenue run rate of Rs 1,300 crore. Saffola Foods posted double-digit growth, led by soya chunks, oats and muesli. The company’s organic foods business, excluding acquisitions, also saw double-digit growth.
Food revenue is projected to grow about nine times over FY20 levels by FY27, and 15 times by FY30. This compares with four times in FY24, the report said.
The premium personal care segment reached an annualised revenue run rate of about Rs 450 crore, driven by premium hair nourishment, hair cleansing, male grooming and skin care. The digital-first portfolio, which includes Beardo, Plix and Just Herbs, scaled up to an annualised run rate of Rs 1,100 crore. This portfolio’s exit run rate is expected to expand about 2.5 times by FY27 and five times by FY30 over FY24 levels, with double-digit EBITDA margins by the end of FY27, the report noted.
Marico’s recent acquisitions, 4700BC and Cosmix, are integrating ahead of schedule, the company told Nuvama. Both brands posted healthy sequential growth. Cosmix expanded its range with a fermented yeast protein launch across multiple flavours, the report added.
Parachute, VAHO and Saffola defend Marico’s core as premiumisation reshapes the portfolio
Even as it pushes premiumisation, Marico’s core brands showed strength in the first quarter of FY27. Parachute, a hair-care brand, volumes grew 10% year-on-year, a 20-quarter high, while value grew 23%. The brand’s market share expanded by more than 400 basis points to a record 59%, as per the report.
The company has not cut prices of Parachute this year, apart from one reduction of about 10% in larger packs. Copra prices, a key input, have corrected 29% year-on-year and are expected to stay range-bound with a slight upward bias, the report said.
Value-added hair oil, or VAHO, grew 22% in value terms, aided by high single-digit price hikes. Marico expects VAHO to grow in double digits through FY27. The Almond Hair Oils franchise is targeted to cross Rs 100 crore in revenue by FY28. Parachute Shampoo, a newer launch, is expected to touch the same milestone by FY27.
Saffola edible oil told a different story. Revenue grew 7% year-on-year, but volumes fell in high single digits, as the company scaled back supplies of some variants to protect profitability rather than chase volume growth. Cold-pressed oils, however, continued to gain traction and are expected to become a meaningful part of the Saffola portfolio over the next year, as per the report.
Marico targets Rs 15,000 crore revenue in FY27 and Rs 20,000 crore by FY30
Marico’s management reiterated its target of crossing Rs 15,000 crore in revenue in FY27 and Rs 20,000 crore by FY30. High-teen EBITDA growth is expected in FY27, with the company aspiring to touch 20%. EBITDA margin is likely to expand by 140 to 150 basis points in FY27.
Domestic volume growth for FY27 is expected in high single digits, after a first quarter that saw 11% growth, the highest in 20 quarters. According to Nuvama, Parachute and Saffola edible oil are both expected to post mid-single-digit volume growth for the year.
Marico’s international business grows 15% in Q1 as Vietnam and Middle East markets outperform
Marico’s international business grew 15% year-on-year in constant currency terms in the first quarter. Vietnam led with 27% growth, driven by male and female grooming and e-commerce expansion. The Middle East and North Africa region grew 24%, on strong execution across the Gulf and Egypt.
South Africa grew 8%, led by hair care. Bangladesh grew a slower 4%, hurt by pricing base effects and weak consumer demand amid elevated inflation.
Marico expects its international business, excluding Bangladesh, to grow at more than 20% CAGR between FY26 and FY30, with EBITDA margins reaching the twenties by FY30 from high teens currently, the report noted.