Marico posts high single-digit domestic volume growth in Q2 despite GST disruption and cost pressures

Channel disruptions, commodity cost pressures bite, but core momentum holds—Marico leans on its brands and GST reform benefits

Fast-moving consumer goods company Marico Ltd said it recorded high single-digit volume growth in its domestic business during the second quarter of FY26, despite disruptions caused by the rollout of new GST rates and elevated commodity prices.

The company said in its quarterly business update that it expects modest operating profit growth year-on-year, as it extended discounts on pipeline inventory to channel partners and absorbed input cost pressures ahead of the GST rate changes.

GST impact and volume performance

The government’s new Next-Generation GST 2.0 regime, announced on September 4 and effective from September 22, reduced tax rates on most essential and personal care products. Marico said the transition created temporary disruption in trade channels during the quarter, but underlying demand remained steady.

“Despite the same, underlying volume growth in the India business remained in high single digits, albeit moderating sequentially,” the company said.

Marico added that it has passed on the benefits of the revised GST rates to consumers, with nearly 30% of its India portfolio benefitting from the rationalised tax structure.

Brand-wise trends

• Parachute: Volumes declined in low single digits due to 'unprecedented hyperinflationary input cost' conditions. However, after normalising for grammage reductions, the brand remained flat in volume terms.
• Saffola Oils: Delivered flattish volumes on a high base, with revenue growth in high teens.
• Value Added Hair Oils: Reported high teens growth, driven by strong recovery in mid and premium segments.
• Foods and Premium Personal Care (Beardo, Just Herbs, True Elements, Plix): Maintained strong momentum and continued diversification.

International business and overall revenue

Marico’s international business maintained robust momentum, posting constant currency growth in the twenties. The company said its Bangladesh and MENA (Middle East and North Africa) markets outperformed during the quarter, while other regions delivered stable growth.

Consolidated revenue growth for the quarter is expected to be in the thirties, driven by pricing interventions and an improved product mix.

Margin outlook and commodity trends

The company highlighted continued pressure on gross margins, citing high input costs for vegetable oils and the impact of a high base. Copra prices corrected about 10–12 percent from their highs and remained stable, while crude oil derivatives were benign.

Marico expects margin pressures to ease in the second half of FY26 as input costs stabilise.

“Despite the input cost push, we sustained brand-building investments to reinforce long-term equity and accelerate portfolio diversification,” the company said.

Outlook

Marico maintained its guidance of sustainable, volume-led growth over the medium term, supported by stronger brand equity, expanding premium and digital-first segments, and better market access through its Project SETU distribution initiative.

“The recent GST rate rationalisation is a welcome step toward stimulating demand and long-term growth in the FMCG sector,” the company said.