Mumbai, India – November 14, 2025: Indian fast-moving consumer goods (FMCG) giant Marico Ltd reported quarterly profit figures below analyst expectations on Friday, as soaring raw material costs weighed on margins.

Q2 Profit Falls Short of Estimates

For the second quarter ended September 30, 2025, Marico posted a 0.7% year-on-year decline in net profit to ₹4.2 billion ($47.78 million), missing the estimated ₹4.28 billion according to LSEG data.

Despite the profit dip, Marico’s total revenue rose 31% to ₹34.82 billion, exceeding analyst expectations of ₹34.16 billion. This growth was primarily driven by price hikes across its product portfolio, even as sales volumes of flagship Saffola oils remained largely flat.

Rising Raw Material Costs Hit Margins

Marico faced significant pressure from higher expenses, particularly for raw materials such as copra and vegetable oils. Droughts and pest infestations across Asia have reduced coconut production, pushing up costs for its popular Parachute coconut oil brand, which contributes around 36% of the company’s India revenue.

To offset cost pressures, Marico raised Parachute prices multiple times over the past year, but this led to a 3% decline in sales volume. The company’s overall expenses surged nearly 36%, resulting in a gross margin contraction of 810 basis points.

Government Tax Cuts and Consumer Sentiment

The company highlighted that India’s recent tax cuts, implemented toward the end of the quarter, benefited roughly 30% of Marico’s domestic business, enabling selective price reductions. CEO Saugata Gupta expressed optimism, stating:

“We expect to maintain healthy volume and revenue growth momentum in the quarters ahead, with profit growth gaining traction as margin pressures gradually abate.”

Strategic Focus on Packaged Foods and Premium Personal Care

Following the example of peers such as AWL Agri Business, Marico is accelerating its push into packaged foods and premium personal care segments. The company aims to increase the contribution of these categories to 25% of revenue by fiscal year 2027, up from roughly 22% in the first half of the ongoing fiscal year.