Marico has earnings growth tailwinds amid heightened uncertainties

Marico Ltd, even as war-led disruption and cost pressures are set to lash its fast-moving consumer goods (FMCG) peers. The Nifty FMCG index is down 16% so far this year, while Marico’s stock has been largely flat.

The key driver: copra prices. The commodity, a core input for the maker of Parachute hair oil, has fallen about 35% from its peak and is expected to remain range-bound in the months ahead, Marico has said.That decline offers Marico a cushion against broader input inflation triggered by the ongoing West Asia conflict, giving it relatively stronger earnings visibility than peers.

Copra accounts for roughly half of Marico’s raw material basket, according to Motilal Oswal Financial Services. Further, crude derivatives (including packaging) form 18-20% of total raw materials, implying a lower impact than that faced by Marico’s peers, said the brokerage.In its March quarter (Q4FY26) business update, Marico said it expects its gross margin to increase sequentially during the quarter, thanks to easing copra prices.

This would mark a second straight quarterly improvement after margins recovered to 43.5% in Q3 from a multi-quarter low of 42.6% in Q2. JM Financial Institutional Securities estimates Marico’s Q4 gross margin at 44.8%, though lower from the 48.6% seen in Q4FY25.Continued brand building investments would mean double-digit year-on-year growth in Ebitda in Q4.

JM Financial expects 15% Ebitda year-on-year growth in Q4. Note that Ebitda had increased 7.5% year-on-year in the nine-month ended December (9MFY26).“Marico also has other margin levers (margin expansion in foods/D2C and improving growth in VAHO), which will drive overall earnings trajectory over FY27/28E,” said JM’s analysts in a report on 2