MARICO - Marico Limited Share Price

Management Outlook:
Marico's management remains confident in achieving double-digit consolidated revenue growth for FY25, supported by robust performance in both domestic and international markets. The India business reported a 13-quarter high in volume growth, with rural demand improving (2x urban growth). International markets sustained double-digit constant currency growth, despite currency headwinds.

Key Points:

1. Category Performance:

   • Parachute: Resilient despite price hikes; expects copra inflation to ease by Q1 FY26.
   • Saffola Edible Oils: Stable post-price hikes; poised for steady growth barring vegetable oil volatility.
   • Foods Business: Reached Rs.1,000 crores ARR (annualized run rate); aims to improve profitability with scale.
   • Premium Personal Care/Digital-First Brands: Combined ARR of Rs.1,900 crores; targeting double-digit EBITDA margins by FY27.

2. Strategic Initiatives:

   • Channel Diversification: Focus on alternate channels (e-commerce, modern trade) for premium/urban portfolios while reviving GT (General Trade) via Project SETU in 11 states.
   • Cost Management: Pricing actions, scale benefits in Foods, and international margin upside to counter input inflation.

3. International Markets:

   • Strong growth in Bangladesh, MENA, and South Africa; muted in Southeast Asia due to geopolitical issues.

4. Margins & Inflation:

   • Near-term margin pressure from copra/vegetable oil inflation but expects relief post-Q1 FY26. Focus on sustainable diversification (Foods, digital brands) to offset cyclical pressures.

5. Long-Term Goals:

   • Sustain top-quartile volume growth in India, double-digit revenue growth, and rural recovery. Emphasize ESG through Sustainability 2.0 initiatives.

Challenges:

• Transient volume impact from pack price adjustments.
• Subdued Value-Added Hair Oils (VAHO) due to competition; reallocating resources to mid/premium segments.

Confidence Drivers:

• Anticipated copra deflation cycle, strategic pricing power, and scalable diversification in Foods/digital portfolios.

Question 1:
Abneesh Roy (Nuvama): Could you discuss the distribution scale-up expectations for Plix and True Elements, competitive intensity in these segments, and their profitability versus internal expectations?
Answer: Plix and True Elements have low cash burn, focusing on sustainable growth over high cash-burn expansion. GT distribution requires differentiated SKUs and pricing to avoid channel conflict. Competition in "better-for-you" Foods is manageable due to large market potential. Plix aims for Rs.500 crore ARR soon, prioritizing hero SKUs and avoiding deep discounts to protect brand equity. Profitability is prioritized with gradual scaling.

Question 2:
Percy Panthaki (IIFL Securities): How is the food business segmented (oats, honey, etc.), and what are its current EBITDA margins and future targets?
Answer: Oats dominate the food portfolio, nearing company-average EBITDA margins. Smaller segments like honey and soya are scaling, with margins improving as they reach Rs.150"“200 crore revenue. Foods' blended gross margins aim to exceed core business margins. By FY27, Foods and digital portfolios are expected to merge with company margins, driven by scale and GT penetration.

Question 3:
Avi Mehta (Macquarie): What is the near-term EBITDA margin impact of copra and vegetable oil inflation?
Answer: Higher copra costs led to partial price hikes, prioritizing volume and market share. Consolidated EBITDA margin is expected at ~20% for FY25, balancing input inflation, pricing actions, and mix benefits. Long-term margin resilience is driven by scale in Foods, digital brands, and cost management.

Question 4:
Arnab Mitra (Goldman Sachs): How is Plix sustaining growth in crowded personal care, and what drives VAHO's recovery?
Answer: Plix leverages D2C strength, international expansion, and R&D synergy with Marico. VAHO focuses on mid/premium segments, reducing reliance on BTL promotions. Growth is driven by brand equity investments, with value share gains outpacing volume.

Question 5:
Kartik Chelappa (Indus Capital): What are GT growth convergence timelines and VAHO's regional trends?
Answer: GT growth improvement is expected gradually via Project SETU and urban premiumization. Quick commerce drives alternate channels (50%+ growth). VAHO's rural-focused segments face unsustainable BTL competition; growth hinges on premiumization and urban demand recovery.

Question 6:
Sheela Rathi (Morgan Stanley): How is VAHO's portfolio reset progressing, and how does Saffola compete in Foods?
Answer: VAHO shifts focus to mid/premium tiers, reducing low-margin BTL spend. Saffola's strong equity in "better-for-you" categories and low penetration in Foods offer long-term growth. GT expansion and differentiated SKUs are key to scaling Foods profitably.