Marico Q2 FY27 Earnings Call: Raises FY27 EBITDA Growth Guide to 24-25%, Rs. 20,000 Cr Target Preponed to FY29

Highest PAT Growth in 50 Quarters; Margins Expand Despite Heavy A&P

• Q2 FY 2026-2027 consolidated results — revenue +13%, EBITDA +27%, PAT +31%, the highest PAT growth in the last 50 quarters; gross margin expanded ~600 bps YoY on favorable portfolio mix, improving new-growth-engine profitability and softer copra.
• EBITDA margin +200 bps to 18.2% — achieved despite A&P spend rising 44% YoY, reflecting mix and cost discipline.
• H1 FY 2026-2027 actuals — revenue +18%, EBITDA +26%, PAT +28%, with all engines (India core, foods, premium personal care, digital-first, international) contributing.
• Two-year compounding — revenue 22%, EBITDA 17%; India volume compounded at 8% and international CC at 16%.
• Consistency record — over the last 10 quarters, India delivered high-single-digit-or-better volume growth in 7, international teens-or-better CC growth in 9, and consolidated teens-or-better revenue growth in 8.

FY27 EBITDA Guide Raised to Mid-20s%; FY28 Kept at Mid-Teens

• FY 2026-2027 EBITDA guidance raised to mid-20s% growth — Group CFO Pawan Agarwal said the upgraded target implies growth "in the range of 24-25% on the minimum side"; analyst Percy Panthaki (IIFL Capital) framed the raise at ~5-7% and noted it is margin-driven, with no material FY 2026-2027 top-line upgrade.
• FY 2026-2027 margin expansion of ~120-150 bps — though management emphasized it guides on EBITDA absolute growth rather than margin percentage.
• Raise applies to FY 2026-2027 only — "From FY28 or 29, we stick by our guidance of mid-teens growth from a margin perspective," clarified as mid-teens EBITDA/operating-profit absolute growth; Pawan Agarwal reaffirmed at least mid-teens EBITDA growth from FY 2027-2028 onwards with no risk flagged.
• FY 2026-2027 revenue — management is increasingly confident of teens% growth, comfortably crossing Rs.15,000 crore, with an opportunity to push towards mid-teens%; India volume growth expected to touch double digits for full-year FY 2026-2027.
• Rationale for the raise — better visibility into FY 2026-2027: known input positions, a fair idea of consumption costs for the remainder of the year, and a better read on the volume/revenue trajectory; the analyst's hypothesis that the upgrade reflects margin normalization arriving earlier than a 4-6 quarter window was not confirmed by management.
• Risk flagged — the external environment remains challenging; the outlook is baked in at current crude levels and does not assume drastic improvement over the next 6 months (Q3 FY 2026-2027 into Q1 FY 2027-2028), with deficient rainfall in certain Indian states and potential crude-linked inflation cited.

Parachute at 22-Quarter High; Foods Cross Rs.1,500 Cr ARR

• Parachute +13% volume in Q2 FY 2026-2027 — highest in 22 quarters; ~570 bps volume market share gain to a new high of 60%, with positive value growth despite a deflationary pricing environment. Management attributed the beat to selective price cuts on mid/large loyalty packs, a thin pipeline (daily 3.5% sale rhythm, claimed thinnest in the industry), Setu rural deepening (stockists ~1.8x), and supply-chain shocks hurting smaller players more (viewed as transient).
• Value-added hair oils +21% value growth — sixth consecutive strong quarter; +80 bps MAT value share; mid/premium pivot delivered mid-teens volume growth. Almond franchise on track to scale to >Rs.100 crore ARR by FY28, with a medium-term aspiration of Rs.200-250 crore ARR by FY30.
• Foods +45% in Q2 FY 2026-2027 — crossed Rs.1,500 crore ARR; Saffola Foods grew early-teens led by oats, muesli and soya chunks; Saffola Oats retained India's #1 oats position; True Elements, 4700BC and Cosmix scaling with sequential acceleration.
• Saffola edible oils reset — deliberate rationalization of low-margin variants drove high single-digit volume decline while revenue grew 6% in Q2 FY 2026-2027; reset to be completed over the next 2-3 quarters.
• Premium personal care crossed Rs.500 crore ARR — led by Livon Serums and Parachute Advanced Protein Shampoo; management confident of Rs.100 crore+ shampoo ARR in FY 2026-2027, with a medium-term aspiration of a Rs.400-500 crore ARR portfolio; shampoo now contributes ~4-5% of total turnover.
• Digital-first portfolio ~Rs.1,150 crore — Beardo scaled >6x since the 2020 acquisition, expected to cross Rs.400 crore in FY 2026-2027 with profitability improved by 1,900 bps; Cosmix runs high-teens operating margins and is set to structurally move into VMS "very soon"; 4700BC break-even expected "definitely significantly ahead" of target dates (specific dates not disclosed).
• International Q2 FY 2026-2027 CC growth — Bangladesh +5% (sequential improvement despite demand softness; 13% two-year compounding), Vietnam +22%, MENA +15%, South Africa +15%, new country development & exports +17%.

Protein, Shampoo and Almond Named the Big Bets

• Protein is a "big bet" — across categories, price points and consumer segments via 4 brands (Saffola, Cosmix, Plix, True Elements); soya chunks run at ~Rs.100 crore ARR as of Q2 FY 2026-2027, and management said what was done on oats needs to be done on soya chunks; management believes Marico can be a broad-spectrum, big protein player over the medium term.
• Shampoo scaling fast — Parachute Advanced shampoo, launched May 2026 (FY 2026-2027) with general trade expansion in July-August 2026, should cross Rs.100 crore within its first year; the launch was de-risked by first entering Bangladesh, then the Middle East, with ~15 years of category experience via X-Men in Vietnam. Management expects shampoo to reach Rs.400-500 crore in the near term (period unspecified).
• Almond named alongside shampoo — management sees a case for replicating the 2009-2016 amla playbook in almond over the next 5-7 years and believes it has "got the mix right this time."
• Just Herbs turnaround — after first-year integration issues, significant improvement in top line and bottom line; break-even "should happen" over Q3-Q4 FY 2026-2027; levers cited: SKU rationalization, channel focus, improved D2C AOV, quality upgrades and content/influencer investment.
• M&A discipline — management has been deliberately less adventurous in Africa and LATAM, positions itself as a strategic partner of choice for digital brands, but stays disciplined on valuation, stating it does not pay 6x multiples; inorganic "should never be an escape button" for organic delivery.
• Satya Nutraceuticals (Plix) — the entry into Korean beauty via Joyoon is a prototype; management may experiment with additional brands/sub-brands under scaled-up acquisitions Beardo and Plix, while other acquired brands remain too small for such experiments.

Setu 2.0 Embarked; A&P to Normalize to 10-10.5% of Sales in FY28

• Project Setu phase 1 ~70% complete as of Q2 FY 2026-2027 — direct reach up >1.5x, rural stockists nearly doubled, delivering a structural 1-2% incremental volume growth on a conservative basis; benefits first accrued to second/third brands (Jasmine, Hair & Care, Aloe) and are now extending to Parachute.
• Setu 2.0 levers — urban Setu for the premium portfolio, tech/AI-enabled execution, and digital brands plus food in general trade; gamification of incentives and assortment selling described as "pretty unprecedented in the industry," with prototype results to be shared over the next 6 months. Setu implementation begins in Bangladesh in Q3 FY 2026-2027 after visible impetus in Vietnam within 1 year of rollout.
• A&P +44% in Q2 FY 2026-2027 — skewed toward shampoo and almond, core brands, Parachute expansion in non-Maharashtra markets, and core foods; FY 2026-2027 A2S ratio is up a marginal ~1% and will stay at this level for the year.
• FY 2027-2028 A&P guided at ~10% to 10.5% of sales — Pawan Agarwal confirmed the elevated intensity is near-term only; management expects double-digit A&P growth in the India business (period unspecified).
• Trade discipline — all month-end/quarter-end trade loads and schemes eliminated (CEO observed on 31 Oct 2026 that nobody was tracking sales — flows are now automatic); BTL savings redeployed into A&P.
• Cost environment — copra range-bound at ~35% below the FY 2025-2026 peak, while crude-linked derivatives and veg oils rose on geopolitical/weather concerns; management to cushion crude-linked inflation via pricing power of copra-advantaged brands and an aggressive cost-management program.

Rs.20,000 Cr Aspiration Pulled Forward to FY29; Doubling Every 4-5 Years

• Rs.20,000 crore revenue aspiration preponed from FY30 (FY 2029-2030) to FY29 (FY 2028-2029) — Saugata Gupta said the pull-forward is an aspiration and has not been broken up bottom-up; management "will aspire to" it, citing a "strong possibility" given visibility that FY 2027-2028 will not be majorly deflationary. The target is based on the organic portfolio; any inorganic additions would be upside.
• 13-14% revenue CAGR till FY29 (FY 2028-2029) looks "fairly achievable" — per Pawan Agarwal, given current momentum, but stressed no bottom-up plan exists yet; the pull-forward is an aspiration to rally the organization towards achieving targets one year ahead.
• Medium-term growth construct — mid-single-digit growth for Parachute Sapolo, double-digit value growth in value-added hair oils, and 20-25% from the growth portfolio (now 27% of India business, up from 20%), a construct management said enables the business to double every 4 to 5 years.
• Base case construct — high single-digit growth in India "definitely" over the next couple of years (FY 2026-2027 onwards) and mid-teens international business growth, with inflation broadly assumed at ~3%.
• International acceleration — biggest driver is sequential improvement in Bangladesh growth (lapping a very high prior-year base while its two-year CAGR remains very high), with Setu expected to start delivering incremental growth in Bangladesh; management expects only a marginal improvement in overall IBG growth, explicitly not "into the 20s" (period unspecified).
• Parachute medium-term comfort — FY 2026-2027 expected to be a very good growth year, but management reiterated comfort with 4-6% growth over the medium term (period unspecified) and said it is no longer dependent on copra/Parachute for overall performance given multiple growth vectors.