• Domestic Volume Growth: Sequential uptick led by trends across the majority of portfolios.

• Market Share: More than 80% of the business either gained or sustained market share on a MAT basis.

• Parachute Volume Share: Gained 120 bps on a MAT basis.

• Parachute Revenue: Moved to double digits aided by pricing intervention.

• Saffola Edible Oil Pricing: Price increase of at least 15% due to hike in import duties.

• Value-Added Hair Oil Market Share: Gained 110 bps in value market share.

• Food Segment Revenue: Surpassed INR1,000 crore in annual run rate in Q2.

• Premium Personal Care ARR: INR525 crore in annual recurring revenue, expected to reach INR600 crore exit ARR this year.

• International Business Growth: Strong double-digit growth momentum.

• Consolidated Revenue Growth Outlook: Expected to move into double digits in the second half of the year.

• Warning! GuruFocus has detected 5 Warning Sign with BOM:531642.

Release Date: October 29, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Marico Ltd (BOM:531642) reported stable demand trends with rural areas outpacing urban growth for the third consecutive quarter.

• The company achieved a sequential uptick in domestic volume growth, with more than 80% of the business gaining or sustaining market share.

• Project SETU has been successfully extended to 10 states, aiming to transform the long-term potential of Marico's GT sales infrastructure.

• The food segment surpassed INR1,000 crore in annual run rate, driven by strong growth in Saffola and newer franchises.

• International business continues to show strong double-digit growth, with notable performances in Bangladesh, Vietnam, MENA, and South Africa.

Negative Points

• Urban demand faces challenges due to food inflation and muted sentiment, particularly affecting the middle and lower middle-class segments.

• Saffola edible oil experienced flattish volumes, and the recent 15% price increase could impact future volume growth.

• Value-added hair oil remains sluggish amidst persistent irrational competition, affecting the bottom of the pyramid segment.

• The company anticipates a potential 40 to 50 basis points contraction in operating margins for the full year due to higher-than-expected cost pressures.

• There is a concern about the impact of food and retail inflation trends on future demand and volume growth.

Q & A Highlights

Q: Can you elaborate on the urban demand trends and the performance of your premium segments? A: Saugata Gupta, CEO, explained that the premium segments, including foods and digital brands, cater to the upper middle class, which hasn't seen a consumption impact. The company has invested ahead of the curve, and their digital brands benefit from Marico's ecosystem, allowing for cost advantages and growth without the need for external capital.