Homegrown FMCG firm Marico Ltd has delivered robust financial results for Q1 FY27, with consolidated revenue growing 22% to ₹3,333 crore and net profit increasing 14% year-on-year to ₹391 crore in the quarter ended March 31. According to the company's latest quarterly business update filed with stock exchanges, demand trends remained steady during the quarter, supported by resilient economic activity. The company expects strong operating profit growth driven by robust business growth and softening in copra prices, though it cautioned that evolving inflationary conditions and the potential impact of El Niño on the monsoon remain key risks to monitor in the coming quarters. Looking ahead, Marico remains optimistic about consumption trends while closely monitoring these evolving factors.
The latest quarter marks Marico's strongest volume growth in several quarters, signaling a genuine FMCG sector turnaround rather than a statistical blip. As per Nuvama Institutional Equities MD Abneesh Roy, this recovery isn't a low-base illusion - the sector-wide recovery actually began in the fourth quarter and has carried into Q1. Roy expects this momentum to hold for roughly two more quarters, supported by improved GST compliance and ongoing price hikes. The company's Parachute Coconut Oil delivered robust performance touching double-digit volume growth, its highest in several quarters, with volumes holding flat despite the company raising prices by nearly 60% over the course of a year to offset severe copra inflation. This performance demonstrates strong execution capabilities and consumer loyalty to the brand.
According to Kotak Institutional Equities Q1FY27 preview, the consumer staples sector is expected to show resilient growth with mixed margin trends across most companies. Among staples, Marico is projected to deliver 20% organic revenue growth, while Nestlé India is forecasted to achieve 19.3% growth. Honasa Consumer is expected to report 22% organic revenue growth, and Godrej Consumer Products is projected at 12.5% growth. Kotak expects no major year-on-year impact on EBITDA margins for most names due to price hikes, low-cost inventory and moderated advertising spends. The brokerage anticipates that staples companies will benefit from low-cost inventory and timely price hikes implemented during the quarter.
The international business maintained strong momentum with mid-teens constant currency growth, led by Vietnam and the MENA region, while all other markets also contributed positively. According to Marico, Bangladesh saw temporary moderation in growth due to pricing anniversarization and softer demand amid elevated inflation. The company expects to maintain this strong international performance going forward, with the international segment delivering robust growth across multiple regions.
The real story for Marico lies in its raw material costs, particularly copra prices which have fallen roughly 45% from their peak, though they remain above historical averages. As per Nuvama Institutional Equities, Marico is close to a meaningful margin inflection point. For the first quarter, Nuvama expects around 18% consolidated EBITDA growth alongside 21% revenue growth, numbers that reflect just how close the company already is to a full recovery. Roy believes raw material costs across Marico's basket will remain deflationary for the next two to three quarters, with copra prices now stable after their sharp correction. Other inputs like packaging and select food-related raw materials saw temporary spikes but are now returning to pre-crisis pricing levels.
Following the stronger-than-expected Q1 performance, multiple brokerages have raised their earnings expectations for Marico. Morgan Stanley maintained an Overweight rating with a target price of ₹934, noting that first-quarter top-line growth exceeded expectations. JPMorgan also maintained Overweight with a target price of ₹900, expecting EBITDA growth in the high teens. Macquarie maintained Outperform with a target price of ₹890, highlighting sequential volume growth improvement. Goldman Sachs maintained Buy with a target price of ₹900, citing volume growth acceleration into double digits. The brokerages noted that while higher advertising and promotional spending accelerated during the quarter, strong operating profit growth is expected, supported by business growth and softer copra prices. Nuvama has reiterated its bullish stance with a 'Buy' rating and target price of ₹1,000, citing strong Q1FY27 updates and volume growth, while Prabhudas Lilladher initiated coverage with a 'Buy' rating and ₹1,873 target on Blue Star, highlighting robust earnings visibility and leadership in the HVAC sector.
Shares of Marico Ltd gained 0.59% to ₹856 on the National Stock Exchange following the quarterly results announcement. The Nifty FMCG index gained 0.56% during the same trading session. Looking ahead, the company remains confident in achieving sustainable, profitable, volume-led growth in the medium term, leveraging its strong brand equity and new growth engines across markets. Marico reiterated its medium-term aspiration of delivering sustainable, profitable, volume-led growth through stronger core brands and the scaling up of new growth engines across domestic and international markets, while closely monitoring evolving inflationary conditions and weather-related developments that could influence rural demand.
