FMCG major Marico released its fiscal first quarter business update reporting a strong start to the financial year, underpinned by improving demand conditions and steady growth across key domestic and international markets.
During the quarter, Marico said, the sector exhibited consistent demand patterns, marked by improving trends in rural markets and steady urban sentiment. “We expect gradual improvement in the quarters ahead, supported by easing inflation, a favourable monsoon season and policy stimulus,” it said in a regulatory filing.
Marico announced that its consolidated revenue registered a growth on a year-on-year basis in the low twenties, driven by sustained demand from rural consumers, although margins remained under pressure.
The FMCG major forecasts gross margin to remain under incremental pressure, on a particularly high base and partly due to the pricing-led high denominator effect. Among key inputs, it added, copra prices continued to witness sequential inflation, which was heightened by unseasonal rainfall patterns. Vegetable oil prices eased following the cut in import duty, while crude oil derivatives remained rangebound. “We expect gross margin pressures to ease from the second half of this fiscal year,” it said in a regulatory filing.
Operating profit growth is expected to remain modest on a year-on-year basis in the first quarter of FY26.
Brokerages on Marico
According to brokerage firms, the sector witnessed a consistent demand environment in Q1FY26 as rural continues to improve while urban sentiment remains steady. “The company expects gradual improvement in the quarters ahead, supported by easing inflation, a favourable monsoon season and policy stimulus,” said JM Financial, adding that Marico has maintained its guidance to deliver double-digit growth driven by improving volume trajectory.
Nomura, meanwhile, added that Marico has estimated revenue in low-twenties which is better than its estimates of 20.7 per cent YoY growth. It said that the company is expected to outpace its peers in terms of growth rate.
Performance across segments
The company said that the underlying volume growth in the India business continued to improve sequentially to reach a multi-quarter high, driven by positive trends in the core franchises and continuous scale up of new businesses.
Parachute witnessed a marginal dip in volumes in the hyperinflationary input cost and pricing conditions. However, it said, the brand showed strong resilience, managing to handle significant price hikes and reductions in pack sizes — including a major change in June 2025 — with little effect on overall sales. After adjusting for these changes, the number of packs sold still showed growth during the quarter.
Saffola Oils posted a healthy performance with revenue growth in the high twenties, backed by mid-single digit volume growth.
Value Added Hair Oils grew in low double digits, showing a strong recovery, especially in the mid and premium segments. Marico said that the brand is expected to maintain steady growth through the year, supported by a shift in focus from trade promotions to brand-building efforts and improved direct distribution through Project SETU.
Foods and Premium Personal Care, including digital-first brands, maintained the accelerated scale-up while maintaining profitability.
The International business, meanwhile, delivered high-teen constant currency growth, driven by broad-based growth across most markets. Bangladesh continued to exhibit visible resilience with high-teen constant currency growth.
To conclude…
While Marico maintained its aspiration of delivering sustainable and profitable volume-led growth over the medium term, Nomura summarised key risks as:
(1) Higher-than-expected volume pressure due to price hikes;
(2) sharper-than-expected decline in copra prices in H2FY26F; and
(3) weaker- than-expected growth in its new/growth portfolio.