Marico Expects Double-Digit Profit Growth in Q4 FY26

Introduction

Marico Ltd, the consumer goods company behind brands like Saffola and Parachute, announced a positive outlook for the fourth quarter of fiscal year 2026. The company expects to achieve double-digit year-on-year growth in operating profit, a development that pushed its shares up by 2.5% following the announcement on April 2, 2026. This projection is supported by stable consumer demand and a gradual recovery in consumption trends across its product categories.

Strong Revenue and Margin Projections

For the quarter ending March 31, 2026, Marico anticipates its consolidated revenue to grow in the low twenties on a percentage basis. A key factor contributing to this optimistic forecast is the expected sequential improvement in gross margins. The company attributes this to lower prices for copra, a critical raw material for its haircare products. Marico has observed a gradual uptick in consumption after several quarters of subdued demand, particularly in urban areas, partly due to reductions in the Goods and Services Tax (GST) that have improved affordability.

Performance Across Key Segments

The company's India business delivered high single-digit underlying volume growth, showing a slight improvement from the previous quarter. The performance of its flagship brands highlights this steady momentum. Saffola cooking oils are projected to register high single-digit growth, while Parachute coconut hair oils are expected to see low-single digit growth. Marico remains confident that volume growth for Parachute will accelerate over fiscal year 2027, supported by selective price adjustments to pass on the benefits of easing copra prices to consumers.

Other segments also demonstrated robust performance. The Value Added Hair Oils (VAHO) category continued its strong trajectory, growing in the twenties. The foods portfolio also posted high-teen value growth, indicating a successful move towards a faster scale-up. The international business contributed positively, with the exception of the Gulf region, which was affected by geopolitical headwinds in March.

Management's Vision for FY27

Looking ahead, Marico's management has expressed confidence in delivering healthy, volume-led revenue growth in fiscal year 2027. The company reiterated its focus on achieving sustainable and profitable growth over the medium term. This strategy involves continued investment in brand building to strengthen its core franchises while simultaneously accelerating its diversification efforts. However, the company noted that the macroeconomic impact of the evolving geopolitical situation in the Middle East remains a key factor to monitor.

A Look Back: Marico's FY25 Performance

To provide context for its current growth trajectory, Marico's performance in the financial year 2025 was a significant milestone. The company's consolidated revenue surpassed the ₹100 billion mark for the first time, underscoring its consistent expansion. The strong results from FY25 set a solid foundation for the growth anticipated in FY26.

Strategic Diversification Paying Off

Marico's long-term strategy to diversify its portfolio and reduce dependence on its traditional oil brands is yielding positive results. The combined revenue share of its Foods and Premium Personal Care (PPC) segments reached approximately 22% of its India revenues in FY25. The company is on track to achieve its target of increasing this share to 25% by FY27.

The growth in its digital-first portfolio, which includes brands like Beardo and Plix, has been particularly strong. This segment exited FY25 with an Annual Revenue Run-rate (ARR) of ₹7.50 billion, significantly contributing to the company's topline. Initiatives like Project SETU are also helping Marico expand its reach in the general trade channel, further strengthening its market presence.

Analyst Perspectives

Market analysts maintain a positive long-term outlook on Marico, citing its successful portfolio diversification and the strong performance of its new-age businesses. Brokerages like Motilal Oswal expect the company to deliver compound annual growth rates of 11% in revenue and 13% in EBITDA between FY25 and FY27. The foods business is projected to grow at a robust 20-25% CAGR, driven by a strong innovation pipeline. While high input costs are seen as a near-term headwind for margins, the overall sentiment remains optimistic about Marico's ability to deliver steady, double-digit growth.

Conclusion

Marico's update for the fourth quarter of FY26 indicates a strong finish to the fiscal year, fueled by resilient consumer demand and strategic pricing. The company's focus on volume-led growth, coupled with its successful diversification into high-growth segments like foods and digital-first brands, positions it well for sustained performance in FY27. While external factors such as geopolitical tensions require monitoring, the company's internal strategies appear robust and effective.