MARICO

: Margin Rebound and Portfolio Gains Support FY26 Guidance

shares surged to a 52-week high of ₹775.20, buoyed by signs that margin pressures may be easing. With copra prices down ~30% from peak and expected to soften further, Q3FY26 margins are set to improve sequentially. Volume-led growth remains resilient, and strong performance in value-added hair oils (VAHO) and international markets supports Marico’s 25%+ FY26 revenue growth guidance. Margin Recovery in Q3FY26 - Gross margin estimated at ~44%, up 135 bps QoQ. - EBITDA margin projected at 16.5%, rebounding from multi-quarter lows in Q2. - Operating profit growth expected in double digits, vs mid-single digits in H1FY26. - H1FY26 EBITDA margin had declined 360 bps YoY to 18.1% due to copra inflation. Volume and Segment Trends - Domestic volumes grew in high single digits, slightly above Q2’s 7% growth. - Parachute volumes dipped due to price hikes but held up better than expected. - Saffola posted a muted quarter, while VAHO growth accelerated to 20%+, driven by mid-premium expansion and GST rationalization. - Consolidated Q3 revenue growth estimated in high 20s, beating earlier forecast of ~24%. - International business grew in early 20s (constant currency), led by Bangladesh, with Vietnam and South Africa showing double-digit rebounds. - Margin recovery will depend on portfolio mix, especially in the food segment. - Corrective actions and scaling of digital-first brands expected to broaden earnings base. - Potential price cuts in Q4FY26E if copra prices continue to ease. - Stock trades at 47x FY27e earnings, pricing in margin recovery. - Investors will monitor copra price trends and sustainability of margin gains. - Any sharp commodity price swing could negatively impact profitability.