Alpha | Marico Ltd. – Equity Research Desk

Marico Ltd – Leading Consumer Wellness Brand

Established in 1988 and headquartered in Mumbai, Marico Ltd. is one of India’s leading consumer goods companies, with a strong presence in the global beauty and wellness space. The company operates through a robust manufacturing infrastructure comprising 6 domestic and 8 international facilities, catering to diverse consumer needs. The company’s well-known brands include Parachute, Saffola, Hair & Care, Nihar Naturals, Livon, Set Wet, Mediker, and Revive in India, along with international brands such as Fiancée, HairCode, Caivil, Black Chic, and X-Men. Marico boasts a vast distribution network of over 7,500 stockists, reaching more than 5.8 million retail outlets across both urban and rural India. The company also maintains a strong presence in modern trade and e-commerce platforms, enabling access to over 60,000 villages, thereby ensuring deep market penetration and consumer reach.

Products and Services

The products offered by the company can be majorly classified under categories such as coconut oil, refined edible oils, value added hair oils, leave-in hair conditioners, male grooming and packaged foods, among others.

Subsidiaries: As of FY25, the company has 21 subsidiaries and no other associates/joint ventures.

Investment Rationale

• Established brands driving resilient performance – Marico’s core portfolio continues to demonstrate resilience and growth across key categories. Parachute, Saffola Oils and the Value-Added Hair Oils (VAHO) segment remain strong contributors, marking a value growth of 31%, 28% and 13% respectively during Q1FY26. Despite inflationary pressures, Parachute volumes remained stable, with the company taking calibrated price hikes in response to rising copra costs. The Foods business, anchored by brands like Saffola, True Elements, and Plix marked a robust value growth of 20% during the quarter. The Saffola franchise is expanding with successful new product launches such as Saffola Dual Seed Cold Pressed Oils and Saffola Cuppa Oats, while Saffola Oats continues to lead its category with double-digit growth. Internationally, the company continues to deliver double-digit constant currency growth, with premium portfolios now accounting for 29% of international revenue and showing robust traction in markets like Bangladesh and MENA. Alternate channels including e-commerce, modern trade, and quick commerce remain key growth enablers, particularly in premium and health-oriented segments.

• Expansion plans – Marico is actively investing in strategic growth areas, with a sharp focus on premiumization, digital-first brands, and foods. The company increased its stake in Satiya Nutraceuticals, owner of Plix, which is showing accelerated momentum. The company also continues to expand its Foods business aggressively, with expectations of 25%+ growth in FY26. The company recently increased its stake in HW Wellness, owner of True Elements, making it a 100% wholly owned subsidiary of the company. To complement its portfolio expansion, it is investing heavily in General Trade and distribution infrastructure. Through Project SETU, the company is enhancing its direct distribution footprint from 1 million to 1.5 million retail stores by FY27, with Rs.80 – 100 crore earmarked for the rollout. This initiative is already showing early signs of traction, with more meaningful impact expected in H2FY26.

• Q1FY26 – During the quarter, the company reported revenue of Rs.3,259 crore, reflecting a 23% YoY growth over Rs.2,643 crore in Q1FY25. Operating profit rose by 5% YoY to Rs.655 crore, compared to Rs.626 crore in the corresponding quarter last year. Net profit increased by 9% YoY, coming in at Rs.504 crore versus Rs.464 crore in Q1FY25. The India business recorded a strong 27% YoY revenue growth, driven by a 9% increase in domestic volumes. Meanwhile, the international business posted a 19% YoY growth in constant currency terms.

• FY25 – During the financial year, the company generated revenue of Rs.10,831 crore, an increase of 12% compared to the FY24 revenue. Operating profit is at Rs.2,139 crore, up by 6% YoY. The company reported net profit of Rs.1,593 crore, an increase of 8% YoY.

• Financial Performance – The company has generated revenue and net profit CAGR of 4% and 10% over the period of 3 years (FY23-25), while the TTM revenue and net profit growth is at 17% and 10%. The average 3-year ROE & ROCE is around 39% and 43% each for the FY23-25 period. The company has a strong balance sheet with a robust debt-to-equity ratio of 0.14.

Industry

The Indian FMCG sector is witnessing robust growth, driven by rising incomes, urbanization, and evolving consumer preferences. The food processing market is expected to grow at a CAGR of 9.5% to reach US$ 547.3 billion by 2028, while the online grocery market is projected to surge at a CAGR of 32.7% through 2032. Quick commerce, fuelled by demand for convenience and digital adoption, has seen FMCG sales grow 50 – 100% in FY25 alone. E-commerce continues to expand, supported by improved digital infrastructure and payment systems. Rural consumption is rising, with increasing demand for branded products and a shift towards organized retail. Simultaneously, India’s Beauty and Personal Care (BPC) market, currently valued at US$ 21 billion, is expected to grow at 10 – 11% CAGR to reach US$ 34 billion by 2028, making it the fastest-growing BPC market globally.

Growth Drivers

• The Union Budget 2025 – 26 offers a strong impetus to consumer spending through increased allocations and tax reforms, directly benefiting FMCG demand.
• Government proposals to reduce the tax burden are expected to enhance disposable incomes, encouraging higher consumption among the growing middle-class population
• Evolving consumer lifestyles, coupled with greater access to digital platforms and e-commerce, are accelerating demand for branded and convenience-driven FMCG products.

Peer Analysis

Competitors – Patanjali Foods Ltd, AWL Agri Business Ltd, etc.

Compared to its peers, Marico demonstrates more efficient capital allocation, reflected in its superior financial performance. The company also enjoys significantly higher operating margins of 19%, outperforming Patanjali (5%) and AWL’s (3%), highlighting its operational strength and premium portfolio mix.

Outlook

Marico is on a strong growth trajectory, with management guiding for 25% revenue growth in FY26 and aiming to double revenue from Rs.10,000 crore in FY25 to Rs.20,000 crore by FY30. The company expects to sustain double-digit revenue and profit growth, supported by 6 -7% base volume growth and a sharp focus on high-potential segments. The Foods business is projected to grow 25% in FY26, with significant headroom in General Trade. Recent acquisitions – Plix and True Elements – have scaled rapidly and turned EBITDA-profitable, expected to cross a combined Rs.1,000 crore ARR in FY26. Strategic initiatives like Project SETU are enhancing distribution, visibility, and profitability.

Valuation

We believe Marico presents a compelling investment opportunity, driven by its strategic focus on strengthening distribution channels and its track record of consistent volume growth. We recommend a BUY rating in the stock with the target price (TP) of Rs.866, 41x FY27E EPS. We also encourage maintaining a stop-loss at 20% from the entry price to manage potential downside risk effectively.

SWOT Analysis

Recap of our previous recommendations (As on 12 September 2025)

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