Marico to continue 'shrinkflation' for few more quarters: CEO Saugata Gupta

Marico MD and CEO Saugata Gupta said that the company will continue 'Shrinkflation' for a couple of quarters, a practice where firms reduce the size of the product while keeping the price the same. According to Gupta, shrinkflation will continue because 'anniversarization' will only happen in Q2-Q3 in the next fiscal.

Notably, the company's input inflation was higher than the expectation in FY 25, resulting in transient pressure on profitability.

"While we are contending with a steeper inflationary commodity cycle than envisaged, which will have some transient impact in the near term, we will judiciously leverage the pricing power of our brands and stay the course on our stated aspirations," Marico's CFO Pawan Agrawal said.

Marico's Q3 profit rises to Rs 406 crore, ad spend up 19%

However, CEO Gupta has anticipated that the inflation cycle is set to end. Prices are expected to cool down once the flush season resumes from early Q1 FY26 (April-June). The company will post gains with some lag, he added.

During the December quarter, Marico witnessed soft demand in the urban region on a sequential basis whereas rural continued to witness improvement, growing at 2x suburban on a year-on-year basis for the third consecutive quarter.

Marico attributed this to government schemes, a rise in MSPs, and a favorable crop season for the ongoing rural recovery. In urban, consumption sentiment remained reasonably stable and healthy amongst the affluent and upper-middle-class segments. While middle and bottom of pyramid segments appeared relatively subdued by inflation and slow wage growth, Gupta added.

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Marico reported a consolidated profit of Rs 406 crore in Quarter 3 of Fiscal Year 2025. The net sales increased from Rs 2,422 crore in Q3 FY 25 versus Rs 2,794 crore in Q3 FY 24.

Among the slew of products, the company's flagship brand coconut oil witnessed a domestic revenue of 33 percent in Q3. On the other hand, the Saffola edible oils revenue stood at 18 percent with 24 percent value growth. The hair oil segment, comprising brands like Hair & Care, Nihar, Parachute, etc, witnessed domestic revenue of 19 percent with 2 percent value growth only in Q3.

The food segment of the company registered a 31 percent value growth in the same period with an annualized run rate close to Rs 1,000 crore, Marico mentioned in the exchange filing.