Marico, a leading FMCG company, is optimistic about achieving double-digit growth in the second half of FY25, driven by an expected moderation in food inflation over the next two quarters.
Hopefully moderate over next two quarters – CEO Saugata Gupta
According to MD & CEO Saugata Gupta, this decline in inflation will boost urban consumption, which has been impacted by high food prices. “We expect that to hopefully moderate over the next two quarters and then the urban growth is expected to recover because that has been impacted a little bit by the high food inflation that is prevailing,” Gupta said to PTI.
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The company has already increased prices for its Saffola range and anticipates similar actions from other FMCG players due to rising raw material costs, such as coffee, cocoa, and palm oil. “In the sector, there will be some price increases… So across the sector, there will be some price increase,” Gupta stated. However, he further stressed that major FMCG manufacturers will absorb some increased commodity prices through cost management initiatives, passing on only a portion to consumers.
Marico registers 7.6% revenue surge to INR 2,664 Cr
Meanwhile, Marico reported a 7.6% increase in consolidated revenue to INR 2,664 crore for the September quarter, along with a 20.2% rise in PAT. Despite challenges from input costs, Gupta expects revenue growth to reach double digits in the second half of the year. “Our revenue growth is also in high single-digits and we are fairly confident about revenue moving into double digits in the second half of the year,” he said.
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Furthermore, the company is witnessing sequential volume improvement, driven by recovery in rural markets, aided by MSP, good monsoon, and increased government spending. Marico’s digital brands and food segment operate at the premium end, where consumption stress is minimal. “So we are pretty hopeful of trying to improve that sequential volume growth a little bit in the second half of the year,” Gupta added.
Regarding potential price hikes for its Parachute coconut oil brand, Gupta noted that Marico has historically performed well during inflation due to its competitive advantage over smaller players. “Our historic track record on inflation has been much better than during deflation,” he said. The company expects copra inflation to cool down, balancing food inflation and farmer protection.
Gupta stressed over growth as a priority, expressing confidence in delivering double-digit growth in the second half of the year. Premium and food currently contribute 21% to Marico’s revenue, expected to rise to 30% over the next five years. “For us growth is important. We are very confident of delivering double-digit growth in the second half of the year,” he said.
