Foods, premium personal care to contribute 25% revenue by FY27: Marico

FMCG major Marico, which is diversifying its portfolio, expects one-fourth of the domestic revenue to come from foods and premium personal care segments in the next two years by 2026-27, according to its annual report.

Besides, Marico expects a "gradual uptick" in the growth of its core categories, helped by improving macro-indicators and the forecast of a normal monsoon.

It expects "domestic revenue growth to outpace volume growth from Q1FY25, in light of the upward bias in prices of some of the key commodities".

Marico's consolidated revenue growth has moved into "positive territory in Q4 and is expected to trend upwards during the course of FY25", said the company which owns brands such as Sffola, Parachute, Hair & Care, Nihar and Livon etc.

 

For the financial year ended on March 31, 2024, Marico's consolidated turnover was at Rs 9,653 crore, down 1 per cent. Its domestic revenue was Rs 7,132 crore, 3 per cent lower than the last year.

As per the strategy, the Mariwala family-promoted company will continue to focus on driving "differential growth" in its urban-centric and premium portfolios through the organised retail and E-Commerce channels.

Marico said it will continue to "aggressively diversify" its Foods and Premium Personal Care portfolios while improving profitability parameters in line with its medium-term strategic priorities.

"After successful initiatives towards refinements in supply chain and GTM during FY24, we aim to grow Foods at over 20 per cent CAGR and scale to 2x of its current scale in FY27," it said.

The scale-up of the Digital-first portfolio has met its stated aspirations and now Marico expects the Annualised Run Rate of this portfolio to scale to 2x of its current run rate in FY27.

"Consequently, we expect the domestic revenue share of the Foods and Premium Personal Care portfolios to expand from 20 per cent currently to 25 per cent by FY27," said Marico.

Under the food business, Marico has launched several products under its master brand Saffola, extending it to breakfast, in-between meals, healthy snacking, immunity, plant-based protein and the nutraceuticals segments.

Marico's premium Personal Care portfolio has witnessed healthy momentum, led by the Digital-first portfolio reaching an exit ARR of Rs 450 crore.

"Its brand Beardo has grown threefold since FY21 with positive EBITDA this year and holds promise of delivering double-digit EBITDA margin in the coming year. Just Herbs also surpassed the H1 billion ARR," said Managing Director & Chief Executive Saugata Gupta addressing the shareholders of the company.

In FY24, Marico's International business has been resilient on account of macroeconomic and currency devaluation headwinds in select regions.

However, with a bounce back from its Bangladesh business, the strong growth momentum in the MENA and South Africa businesses has visibly "strengthened the broad-based construct" and offers margin upside over the medium term.

In the medium term, Marico aims to deliver "double-digit revenue growth" through consistent outperformance and market share gains in the domestic core portfolios, accelerated growth in the Foods and Premium Personal Care and double-digit constant currency growth in the International business.

"We expect operating margin to inch up over the next few years with leverage benefits as well as premiumisation of the portfolios across both the India and International businesses," it said.