Marico reported an 11% domestic volume growth in Q1 FY27, its best performance in five years. Revenue reached ₹3,957 crore, and net profit rose 27% to ₹652 crore. Despite these strong numbers, the stock dipped 3.1% on Wednesday as investors processed the earnings. The company is now balancing its traditional oils business with a push into its foods portfolio.
Marico Ltd. reported a strong start to fiscal year 2027, with consolidated revenue rising 22.8% year-on-year to ₹3,957 crore for the first quarter. The company’s net profit grew 27% to reach ₹652 crore. The headline number for investors was the 11% increase in domestic volumes, which marks the highest growth rate the company has seen in 20 quarters.
This volume growth was largely driven by the company’s flagship Parachute oil brand. Management noted that strategic price cuts, supported by a 45% reduction in copra costs from peak levels, helped the brand recover. By making the product more affordable, Marico was able to win back consumers who might have otherwise moved to cheaper alternatives or smaller, unbranded options.
Despite the positive financial performance, shares of Marico fell by 3.1% on the National Stock Exchange on Wednesday. This reaction suggests that some investors may have chosen to book profits following recent gains in the stock price. Market sentiment appears mixed, as participants weigh the strong volume growth against the challenges faced in specific segments.
While the core oil business showed recovery, the edible oils segment faced pressure. Revenue for Saffola edible oils grew by 7%, but volumes actually declined in the high single digits. To address this, the company is prioritizing its foods portfolio, which currently makes up about 30% of Saffola revenue. Management aims to increase this to 50% in the coming years, shifting focus toward premium products and the cold-pressed oils range to diversify its income.
Marico is also continuing to invest in its distribution strategy, known as Project SETU, and its direct-to-consumer acquisitions, which include brands like Just Herbs, Beardo, and Plix. These digital-first brands are part of the company's long-term plan to move beyond traditional hair and edible oils. However, the company faces execution risks as it attempts to scale these premium and digital-first businesses in a competitive market.
Looking ahead, the primary monitorable for investors will be how the company manages input costs. While copra prices have cooled, the company remains exposed to fluctuations in other vegetable oils and crude-linked derivatives. Additionally, the company is aiming for high single-digit volume growth for the rest of the year, with an aspiration to reach double-digit growth in at least one of the remaining three quarters. Whether the company can maintain this momentum will depend heavily on sustained rural demand and its ability to successfully execute the expansion of its food and premium product ranges.