Marico aims for Foods and premium personal care to contribute 25% revenue by FY27

Marico revenue estimates: FMCG major Marico, which is diversifying its portfolio, anticipates that one-fourth of its domestic revenue will come from the foods and premium personal care segments by the financial year 2026-27, as outlined in its annual report.

Marico also expects a "gradual uptick" in the growth of its core categories, supported by improving macroeconomic indicators and the forecast of a normal monsoon. The company foresees "domestic revenue growth to outpace volume growth from Q1FY25, in light of the upward bias in prices of some of the key commodities."

In Q4, Marico's consolidated revenue growth has entered "positive territory and is expected to trend upwards during FY25," said the company, which owns brands such as Saffola, Parachute, Hair & Care, Nihar, and Livon.

For the financial year ending March 31, 2024, Marico's consolidated turnover was Rs 9,653 crore, a decrease of 1 per cent. Its domestic revenue was Rs 7,132 crore, down 3 per cent from the previous year.

Marico's strategy includes focusing on driving "differential growth" in its urban-centric and premium portfolios through organised retail and e-commerce channels. The Mariwala family-promoted company will continue to "aggressively diversify" its foods and premium personal care portfolios while improving profitability parameters in line with its medium-term strategic priorities.

"After successful initiatives towards refinements in supply chain and GTM during FY24, we aim to grow Foods at over 20 per cent CAGR and scale to 2x of its current scale in FY27," the company stated.

Marico expects the annualised run rate of its digital-first portfolio to double by FY27. Consequently, the company anticipates the domestic revenue share of the foods and premium personal care portfolios to expand from the current 20 per cent to 25 per cent by FY27.

Under its food business, Marico has launched several products under its master brand Saffola, extending it to breakfast, in-between meals, healthy snacking, immunity, plant-based protein, and nutraceutical segments.

The premium personal care portfolio has seen healthy momentum, led by the digital-first portfolio reaching an exit ARR of Rs 450 crore. "Its brand Beardo has grown threefold since FY21 with positive EBITDA this year and holds the promise of delivering double-digit EBITDA margin in the coming year. Just Herbs also surpassed the H1 billion ARR," said Managing Director & Chief Executive Saugata Gupta.

In FY24, Marico's international business demonstrated resilience despite macroeconomic and currency devaluation headwinds in select regions. The Bangladesh business bounce back and strong growth in the MENA and South African businesses have strengthened the broad-based construct and offer margin upside over the medium term.

Marico aims to achieve "double-digit revenue growth" through consistent outperformance and market share gains in its domestic core portfolios, accelerated growth in the foods and premium personal care segments, and double-digit constant currency growth in the international business. The company expects operating margins to increase over the next few years due to leverage benefits and premiumisation across both the Indian and international businesses.

(With PTI inputs)