Marico expects double-digit consolidated revenue growth for Q2 FY27, driven by volume gains in its core hair oil brands. While operating profits are set to grow in the mid-twenties due to lower input costs, investors should note the company's strategic trade-off in the Saffola portfolio and persistent inflationary risks in its Bangladesh market.
Marico has provided a business update for the second quarter of the financial year 2027, projecting double-digit revenue growth at the consolidated level. The company’s performance is largely supported by healthy volume uptake in its domestic business, where core franchises have shown resilience despite broader market fluctuations.
The domestic growth is anchored by the company's flagship coconut oil brand, Parachute, which delivered volume growth in the early teens. Similarly, the Value-Added Hair Oils (VAHO) segment recorded volume growth of approximately 20%, benefiting from the company’s ongoing distribution expansion efforts under its Project SETU initiative. This focus on wider reach has allowed the company to maintain momentum in smaller towns and retail outlets.
However, the company’s performance reflects a mixed strategy in its edible oils business. Saffola Oils reported revenue growth driven primarily by price increases, while volumes in this category declined. This volume contraction was a deliberate strategic choice by management to prioritize profitability and better realization over market share gains during a period of price volatility.
Profitability is expected to remain robust, with operating profits projected to grow in the mid-twenties percentage range year-on-year. This margin expansion is largely attributed to the current trend in raw material costs. Copra prices, a key input for the company, are currently hovering around 35% below their historical peak levels. This favorable cost environment has provided a significant buffer for margins. However, this tailwind is partially offset by rising costs in crude-linked derivatives, which are used in packaging and other processing stages.
The company’s international business also displayed resilience, posting constant-currency revenue growth in the teens. Markets such as Vietnam, the Middle East, and South Africa were key contributors to this international success. Conversely, the business in Bangladesh remains a point of concern for investors. The region continues to face challenges stemming from high inflation and a difficult year-on-year comparison base, which has dampened overall international growth potential.
Looking ahead, the company’s ability to maintain these margins will depend on how it manages the tug-of-war between declining copra costs and potentially rising costs of crude-linked derivatives. Investors may monitor the recovery of volumes in the Saffola portfolio and the stabilization of the economic environment in Bangladesh as key indicators for the upcoming quarters.