Resurfacing Marico's Q2 report: revenue rose 31% as margins compressed on copra costs and brand spending
Marico's Q2 results, originally reported earlier and resurfacing now, showed revenue of Rs 3,482 crore, up 30.7% year on year, while net profit slipped 0.7% to Rs 420 crore. India volumes grew 7%, but gross margin fell 810 bps amid higher copra costs, GST transition effects and a 19% increase in advertising and promotion spend.
What happened
Marico’s Q2 revenue rose 31% while profit edged down amid copra costs, GST transition and higher brand spending. It reported 7% India volume growth, is
Key facts
- Q2 net profit Rs 420 crore, down 0.7% YoY
- Revenue Rs 3,482 crore, up 30.7% YoY
- EBITDA Rs 560 crore, up 7.3% YoY
- EBITDA margin 16.1%, versus 19.6% a year earlier
- Gross margin contracted 810 basis points; EBITDA margin contracted 350 basis points
- Advertising and promotion spending up 19% YoY
- India volume growth 7%
- India revenue Rs 2,667 crore, up nearly 35% YoY
- India contributes 70-75% of overall revenue
- Foods grew 12% YoY and exceeded Rs 1,100 crore annualised revenue run rate
- Digital-first portfolio exceeded Rs 1,000 crore annualised revenue run rate
- International revenue Rs 815 crore, up 19% YoY
- International business grew 20% in constant-currency terms
- Direct distribution planned to expand from 1 million outlets in FY24 to 1.5 million by FY27
Why this matters
Marico’s growth and stepped-up brand investment reinforce the value of scalable, margin-accretive FMCG adjacencies that can diversify exposure to volatile copra costs.
What to watch
- Monthly and seasonal copra-price trends, including monsoon and crop-supply indicators.
- Parachute volume growth versus value growth after pricing actions.
- Sequential gross-margin and EBITDA-margin movement in the next two quarters.
- Advertising-and-promotion spend as a percentage of sales and whether it normalizes after brand launches.
- Rural FMCG demand, downtrading signals and competitive price moves from hair-oil and edible-oil rivals.
- GST-transition effects fading from reported growth comparisons.
- Implement further selective price hikes and grammage reductions in coconut-oil-led portfolios.
- Protect India volume growth through entry-price packs, rural distribution and targeted promotions.
- Sustain elevated advertising behind faster-growing premium, foods and digital-first brands while tightening non-media costs.
- Use hedging, procurement timing and inventory management to reduce exposure to copra-price volatility.
- Provide investor guidance on the timing of gross-margin normalization and the planned advertising-to-sales ratio.