Marico Ltd Q4 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Mihir Shah - Nomura Financial Advisory & Securities (India) Pvt Ltd - Analyst : Hi, thank you for taking my question. Congrats on a great set of numbers. So firstly, on copra, copra has remained for longer than expected. On gross margins, I hear you take another price increase in Parachute leading to 30% pricing and you're not seeing any volume backlogs because of that. That's great news. But on gross margins, how should one think about that going forward? And when should one expect gross margins to start showing improvement or the pricing that you've taken to tied over the inflation. And we can start seeing gross margins to sequentially improve from here on? And for FY26, any level of gross margin that you have in mind that you can share? So that's on question one.

Question: Mihir Shah - Nomura Financial Advisory & Securities (India) Pvt Ltd - Analyst : Great, thanks. Thanks for that. Secondly, on Food. Foods has delivered a strong growth since past few years. Can one say the low-hanging fruits of placing new products and launches is behind and growth probably can moderate a bit from these levels. I understand that the guidance that you've given indicates a 25% CAGR continuing. I just wanted to double check if that range can sustain in any new subcategories that you were thinking of adding or you will probably scaling the current portfolio? So that's on foods.

Question: Mihir Shah - Nomura Financial Advisory & Securities (India) Pvt Ltd - Analyst : Got it. Thank you very much, Saugata. Wishing you all the very best.

Question: Avi Mehta - Macquarie Research - Analyst : Yeah. I just wanted to ask two questions. First, on the expectation that we have of driving or aspiration of driving double-digit value growth in FY26 in India. Could you share your thoughts on what have you built in from an oil price perspective, especially given the recent correction in palm? Just an understanding or is that a risk basically what I'm trying to appreciate is while I get the point of copra deflation not panning out. My only concern was, are you not worried about deflation and Saffola pricing hurting our ability to reach double-digit growth in FY26. And what can see confidence there? So that was what I was trying to get.

Question: Avi Mehta - Macquarie Research - Analyst : Got it. Okay. Okay, sir. Sir, the last bit on the margin front, while I understand the input cost, et cetera. Could you share how should we look at SETU and any quantum of benefit from that initiative?

Question: Avi Mehta - Macquarie Research - Analyst : Okay, sir. So essentially, the first level of improvement will be the volume growth trajectory in particular in VAHO and the second leg could possibly come from a range selling in urban India, which should happen over (multiple speakers) --

Question: Avi Mehta - Macquarie Research - Analyst : Okay, sir, from current level, Okay, sir. Okay. That's all from my side.

Question: Harit Kapoor - Investec Capital Services (India) Pvt Ltd - Analyst : Yes, hi, good evening. I just had two questions. One was specifically on this quarter, foods growth at 44%, it has come off even a pretty good base. Actually, the base growth was also about 20%, so this is the highest growth quarter for us in the year for food. So I just wanted to get a sense of anything incremental that we've seen in Q4, whether it's been a little higher on distribution or certain brands or in the portfolio which have done incrementally better because this number is higher than what we've seen probably the last 8, 10 quarters. So just wanted to get your sense on that.

Question: Harit Kapoor - Investec Capital Services (India) Pvt Ltd - Analyst : Fantastic. The second thing was on Parachute. So there's a 30% increase now on prices. Could you just give us sense of what's happening in the market? I mean, where is this regional unorganized player in terms of the RPI between Parachute and the regionals or unorganized? And you did speak about some supply chain issues that the competition is having which -- due to which they are also having to take price increases. So if you could just explain these couple of things that would be helpful.

Question: Harit Kapoor - Investec Capital Services (India) Pvt Ltd - Analyst : Great. Those are my questions. Wish you all the best. Thank you.

Question: Abneesh Roy - Nuvama Wealth Management Ltd - Analyst : Yeah. This is Abneesh Roy. My first question is on the quick-commerce, do you see the bargaining power increase for you given new players are expected to enter this. Already you're doing so well with 7% in food. So do you expect that now with bargaining power increasing maybe this can even grow faster, given new player entry? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 02, 2025 / 12:30PM, MRCO.NS - Q4 2025 Marico Ltd Earnings Call

Question: Abneesh Roy - Nuvama Wealth Management Ltd - Analyst : Sir, my second question is on the international business. Sales growth has been quite decent past few quarters. My second question was, if you could discuss volume growth in Bangladesh and MENA, how the trends have been? And how the mix has changed. You can compare versus last one year versus, say, two years back, so that a longer time frame can be taken. And would you be worried on the benign crude oil prices for the MENA growth from a one-year perspective, would that impact or it's mostly now company rather than the food oil from a growth perspective in MENA region?

Question: Abneesh Roy - Nuvama Wealth Management Ltd - Analyst : Sir, my last question will be on the A&P spend. So India's largest consumer company also has cut its margin profile from the next two, three quarters' perspective because they've seen that macro seems to be improving, and they want to invest. So is that also a thought process, one of the thought process in Q4 because Q4 run rate is much faster than in terms of growth versus the full year. And if you could tell us if most of the increase in ad spend is for digital and goods essentially in Q4?

Question: Abneesh Roy - Nuvama Wealth Management Ltd - Analyst : Sir, the last quick follow-up on your digital-first. It has done quite well, and you have been one of the early movers and early M&A you have done, and most of them have done well. From an FY26 perspective, will it be more of stabilizing these four to a better profitability with a very good growth? Or you think you need one more M&A because we do see lot of D2C startups available. And we are also seeing other listed companies also starting to do you have been on the early states, but now we have seen other companies. If you could discuss from a FY26 perspective, it's more of stabilizing the current core brands here. .

Question: Abneesh Roy - Nuvama Wealth Management Ltd - Analyst : That's all from my side. Thank you.

Question: Karthik Chellappa - Indus Capital Advisors (Hong kong) Ltd - Analyst : Yes, thank you for the opportunity and, congrats.

Question: Karthik Chellappa - Indus Capital Advisors (Hong kong) Ltd - Analyst : Sure, is this any better?

Question: Karthik Chellappa - Indus Capital Advisors (Hong kong) Ltd - Analyst : Okay, great. Thank you for the opportunity. Congrats on the quarter, and also congrats to Saugata on the reappointment. So I have 2 questions. The first one is, if I were to look at our India P&L for this quarter, the absolute EBIT has actually declined. So despite having about INR 400 crore extra revenue, the EBIT itself has improved much. So how should I see this? And how much of this is, you think, because of raw material inflation impact and how much of this could just be a mix impact?

Question: Karthik Chellappa - Indus Capital Advisors (Hong kong) Ltd - Analyst : Okay. So the two biggest drags are basically the digital hit and the other income, right?

Question: Karthik Chellappa - Indus Capital Advisors (Hong kong) Ltd - Analyst : Okay. Great. My second question is, as far as the Foods business is concerned and the serum and male grooming business is concerned, could you give a sense of what kind of annualized run rate we are running at if I take fourth quarter as a base. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 02, 2025 / 12:30PM, MRCO.NS - Q4 2025 Marico Ltd Earnings Call

Question: Karthik Chellappa - Indus Capital Advisors (Hong kong) Ltd - Analyst : Okay. Great. Because in the third quarter, we have disclosed a run rate for foods at about INR 1,000 crores. So if you have done INR 900 crores, that means that is -- that pace is accelerating, right? That's a reasonable influence.

Question: Karthik Chellappa - Indus Capital Advisors (Hong kong) Ltd - Analyst : Excellent. Just one clarification. The 30% price increase cumulative we have taken in Parachute. That's over what period?

Question: Karthik Chellappa - Indus Capital Advisors (Hong kong) Ltd - Analyst : Excellent. Okay. That's all from my side, and wish you and the team all the very best for FY26.

Question: Abhijeet Kundu - Antique Stock Broking Ltd - Analyst : Yes, hi, thanks for the opportunity. Actually, you are very commendably shown about 13% growth in gross profit during the quarter despite all the inflation and the price hikes we have taken. So gross probably something which is core is something we very important at this point in time. . So my first question was in Project SETU, you said that VAHO would be one of the -- one of the main beneficiary as on date. Does Project SETU improve your presence in underindexed geographies of VAHO or it would be both in under-index the existing form geographies, you will get more. So that is the question.

Question: Abhijeet Kundu - Antique Stock Broking Ltd - Analyst : Understood. And how has been the competitive environment in VAHO and also in case of solar edible oil, because in edible oil, there has been very sharp inflation companies have shown grown, but the volumes have been impacted your volume is relatively been insulated. The impact has been lower. So how has the market share behave there in edible oil and how has been the computing environment in a because you say that your key competitor has increased prices in coconut oil as well as in other oils. So -- so just a perspective on that.

Question: Abhijeet Kundu - Antique Stock Broking Ltd - Analyst : And how is the competitive environment (multiple speakers) --

Question: Abhijeet Kundu - Antique Stock Broking Ltd - Analyst : Very clear. And about the competitive environment in VAHO, any other city has reduced or something like that happened?

Question: Abhijeet Kundu - Antique Stock Broking Ltd - Analyst : Okay. And the last one is, what will be the effective tax rate in the next few years?

Question: Abhijeet Kundu - Antique Stock Broking Ltd - Analyst : That's it for me. Thanks a lot.

Question: Sheela Rathi - Morgan Stanley - Analyst : Thanks for taking my question.Congratulations, Saugata for your reappointment. My first question was with respect to the opening remarks you made that the growth for the listed FMCG companies may not be the right way to look at it or not necessarily representative of the overall growth. So just from your perspective, what would be your sense on the growth last year for the overall consumer space?

Question: Sheela Rathi - Morgan Stanley - Analyst : Understood. And second question is very similar to what Nihal just asked on with respect to Beardo getting to double-digit margins. Just from your lens, again, what would be the gestation period? Is it fair to say that the gestation period for a personal care B2C brand is about 5 to 7 years, whereas for food, it could be much longer. So what would be that number for food businesses when we are pursuing a similar digital first kind of a therapy as well as right TTM strategy rather?

Question: Sheela Rathi - Morgan Stanley - Analyst : Understood. Actually because that's the best thing, right, with respect to the journey for us on the Beardo side on how the profitability has moved. Thank you.

Question: Anurag Dayal - PhillipCapital India - Analyst : Yes, thank you for the opportunity. Sir, one question I have on GT channel. It has been under pressure for quite some time, and you allude you to some of the steps taken to pressure apart from our VAHO initiative, could you tell us what are the states which we have taken? And when you see growth recovering in the channel?

Question: Anurag Dayal - PhillipCapital India - Analyst : So sir, are we doing a differential SKUs for (multiple speakers) --

Question: Anurag Dayal - PhillipCapital India - Analyst : And one more question I have on Bangladesh. Now it's very commendable that we achieved double-digit growth in a tough environment. However, the dividend payout has been a record high in FY25. So I just want to understand the reason behind it. Does it indicate that the growth opportunity in Bangladesh is now limited and maybe you're looking at the international markets, how to understand that (multiple speakers )--

Question: Anurag Dayal - PhillipCapital India - Analyst : Thanks so much.