Marico Ltd - May 2025 Earnings Call Transcript Analysis

Earnings Call Transcript Analysis Report #

Financial Performance #

Key Financial Metrics #

Consolidated Revenue #

• Achieved “double-digit consolidated revenue growth aspiration for FY25.”
• Scaled the “₹10,000 crores revenue milestone this year.”

India Business Revenue #

• Showed “strong top-line growth aided by pricing intervention in core franchises.”

Foods Business Revenue #

• Delivered “robust value growth of 44% YoY in Q4 and 30%+ growth in FY25, surpassing the ₹900 crore mark in annual revenues.”

Digital-first Portfolio ARR #

• “exited FY25 at ₹750 crores ARR.”

International Business Revenue #

• Sustained “a double-digit constant currency growth momentum in Q4 and FY25.”

Volume Growth (India) #

• Continued “sequential improvement in volume growth.”
• Delivered “7% volume growth in Q4 and for the full year we delivered 5%.”
• Parachute recorded “low single-digit volume growth in Q4” (adjusting for ml-age reductions).
• Saffola edible oil volumes are expected “to be steady.”

Margins #

• Consolidated Operating Margin: “FY25 ended just shy of 20%.”

Gross Margins #

• Expected to “remain under pressure for the next one quarter for sure” due to copra inflation, with an anticipated easing “starting end of quarter two.”
• Management highlighted that “dependence on copra as a lever of profitability has come down and will keep going down.”

India Business EBIT/EBITDA #

• While segmental EBIT showed a marginal decline in Q4, “EBITDA for quarter four for India business has actually grown by about 4% to 5%” when adjusted for the digital business.

Foods Gross Margins #

• “structurally expanded gross margins by ~1,000 bps over FY24 and FY25, on a cumulative basis.”

Digital-first EBITDA #

• Beardo reached “near double-digit EBITDA margin.”
• Plix “delivered single-digit EBITDA margin this year.”

A&P Spends #

• “up 35% in Q4 and up 18% in FY25.”
• Management noted, “if A&P had grown in line with our top line growth, our EBITDA growth would have moved to 9% on a full year basis and we would have delivered 20.3% EBITDA margin for the period.”

Revised Guidance or Forecasts #

FY26 Outlook #

• Expect “to sustain double-digit revenue growth and will strive to deliver double-digit operating profit growth.”
• India volume growth for FY26 is anticipated to be “more than 5%,” with “6-7% growth has almost become a base case.”

Digital-first Portfolio #

• Exit ARR target for FY27 raised from 2x to “2.5x of FY24 ARR.”
• Aspiration to achieve “double-digit EBITDA margin by FY ‘27.”

Foods Business #

• Expect “25%+ growth over the medium term.”

Areas of Growth #

• Foods, Premium Personal Care, Digital-first brands, and International business (particularly MENA, Bangladesh, South Africa).

Areas of Decline/Sluggishness #

• Parachute volumes were “muted” in Q4 due to inflation and ml-age adjustments.
• General Trade channel “remained sluggish.”

Strategic Initiatives & Business Updates #

Major Strategic Announcements/Focus #

Diversification #

• Aggressively continuing portfolio diversification.
• “The composite revenue share of Foods and Premium Personal Care in the India business stood at ~22% in FY25… We will continue to aggressively diversify the portfolio… and expect these portfolios to expand to ~25% of domestic revenue by FY27.”

Digital-First Strategy #

• Strong focus on scaling the digital-first portfolio (Beardo, Plix, True Elements, Just Herbs) with a two-cohort approach:

Cohort 1 (Beardo & Plix) #

• Profitable, accelerated growth, targeting combined ARR of ₹1,000 crores in FY26.

Cohort 2 (Just Herbs & True Elements) #

• Sustainable 20-25% growth, focus on achieving breakeven in 18-24 months.