FMCG company Marico's commentary on margin pressure weighs, shares down over 2%

During its third quarter business update, Marico said on January 3 that rising input costs may result in a higher-than-anticipated margin contraction, compared to a year ago. This may be due to the management's focus on expansion of the consumer franchise, said the company.

Moneycontrol News

January 06, 2025 / 11:03 IST

The value-added hair oil segment experienced a slight decline in volumes due to competitive pressures. However, strong performance in the mid and premium segments supported recovery in the category.

26 Aug, 2025 12:21

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Shares of Marico fell by more than 2.5% on January 6, over concerns that a higher-than-expected inflation in copra and vegetable oil prices may have dented the gross margin of the company in Q3FY25. Marico has said it may see a modest operating profit growth this quarter as a result of expansion, and investments in brand building.

CLSA in its note has said that it is expecting a modest operating profit growth of 4.8% YoY for Marico, indicating a contraction. Still, the consolidated revenue growth for the company is expected to be in the mid-teens for Marico, as per CLSA, and the full-year revenue growth is likely to be in double-digits.

During its third quarter business update, Marico said on January 3 that rising input costs may result in a higher-than-anticipated margin contraction, compared to a year ago. This may be due to the management's focus on expansion of the consumer franchise, said the company.

Marico is among Nuvama's top picks from the consumption space, and Citi too has a Buy on the stock with a target price of Rs 750 per share.

The Parachute Coconut Oil brand demonstrated resilience despite rising input costs and a challenging pricing environment, although volumes declined sequentially. The brand achieved low double-digit revenue growth and implemented another price increase in December to counter persistently high copra prices.