Consumer goods major Marico on Friday said it saw September quarter (Q2FY26) consolidated revenue growing at about 30% year-on-year, driven by sharp price hikes and higher sales of its premium hair oils.
Price hikes drive revenue
Best known for its Saffola and Parachute brands, Marico said that 30% of its India business had benefited from the GST rate rationalisation. It also saw underlying volume growth for its domestic business in high-single-digits in Q2, despite trade disruptions triggered by GST 2.0 reforms.
The company, however, expected modest operating profit growth for the second quarter as input cost pressures and brand-building investments were high during the period. It also expected festive season sales to improve on the back of GST cuts, policy stimulus, healthy crop outlook and better consumer sentiment. While gross margin pressures were expected to ease in the second half of the year.
The firm also extended discounts on pipeline inventory to its trade partners in the two weeks leading up to the GST 2.0 implementation date of September 22, as retailers sought to clear existing stock. The company said that it passed on the price benefits to consumers following GST rate rationalisation.
Marico’s business update comes a week after sector bellwether Hindustan Unilever’s (HUL’s) quarterly update where it flagged a near-flat to low single-digit topline growth in Q2 due to GST-related trade disruptions. HUL also said that it saw these disruptions continuing into October as retailers looked to exhaust existing inventory. HUL saw the operating environment stabilising in November.
Marico said that hair oil brand Parachute recorded low single-digit decline in volumes in Q2 amidst sharp input cost pressures. Price hikes in Parachute were more than 60% on a year-on-year basis in Q2 to tide over these inflationary concerns, with the price of copra, a key raw material, remaining range-bound now after correcting 10-12% from its earlier highs.
Brand and international segments sustain momentum
Saffola Oils, meanwhile, delivered flattish volumes with a high base and revenue growth in the high teens. While Value Added Hair Oils (VAHO) delivered high teens growth, reflecting a sustained recovery path.
Saffola cooking oils and the Parachute brand of coconut hair oils make up about half of Marico’s revenue in India. Marico derives about 70-75% of its overall revenue from its India business, while 25-30% of its total revenue comes from international markets.
In Q2, Marico said that its international business maintained its robust momentum with constant currency growth touching the twenties. The Bangladesh and MENA (Middle East North Africa) businesses visibly outperformed, while other markets were steady in their performance, it added.