Marico Focuses on Volume-Driven Growth Amid Market Volatility

Marico Stays Focused on Volume Growth Amid Volatility

Marico, the Indian FMCG company, has reaffirmed its commitment to volume growth despite the current macro uncertainties. In a conversation with Moneycontrol, Marico managing director and chief executive officer Saugata Gupta outlined the company's strategy and outlook on various key fronts.

India has remained relatively insulated from global volatility so far, but the company remains mindful of potential inflationary pressures and any second-half impact of El-Nino consumption. The 5% GST on food and several mass HPC categories is a key driver of long-term growth for Marico. As India's GDP and disposable income rise, consumers naturally gravitate towards better brands and increasingly shift to healthier, more convenient packaged food options.

Marico's philosophy has remained consistent: the company does not believe in cutting back on investments that drive long-term brand building and growth. While it continuously focuses on improving efficiencies, the company remains committed to sustained investments in advertising and capability building. Marico prioritizes acquiring new consumers and driving higher consumption among existing ones to build market share.

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Key Comparison of Marico's Input Costs

Marico's gross margin outlook remains bullish despite other FMCG companies being conservative. The company's ongoing efforts to enhance profitability in the foods and digital business are expected to further support gross margin expansion. Within the overall input cost structure, copra constitutes about 50% of the input cost basket, while crude accounts for 20%. With copra prices having corrected by nearly 30%, this provides a strong tailwind.

Marico's middle east business has been impacted by the ongoing crisis, but the company has successfully navigated disruptions. Importantly, underlying consumption trends remain stable, and Marico is optimistic about early normalisation of the operating environment. The company's food and wellness portfolio is well aligned with the evolving preferences of new-age consumers, with nearly 80% of its portfolio being GLP-1 friendly.

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Marico is deeply committed to the wellness space and is seeing significant headroom for growth through category expansion. Going forward, this will be supported by meaningful innovation in these portfolios, as the company continues to broaden its presence in the nutraceuticals segment.