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Parachute has achieved a new milestone in market dominance, with Marico's Q2 disclosure revealing that the Parachute Rigids franchise now commands approximately 60% of the coconut oil volume share. This performance, measured over the year to September, saw quarterly volumes grow by 13%, marking the strongest growth in 22 quarters. Despite this volume surge, revenue growth stood at a modest 1%, highlighting a strategic gap in the business model.
Marico explained that earlier price reductions passed the benefits of easing copra costs directly to consumers. Copra, the dried coconut kernel essential for oil production, remains the primary influence on the franchise’s financial health. The company aims to leverage its powerful brand equity to retain consumers even as quarterly sales and margins fluctuate in response to raw ingredient pricing. This record performance comes at a time when Marico is explicitly seeking to reduce its exposure to commodity price risks.
By utilizing the strength of its established franchises, Marico is working to build a more resilient earnings mix. Leadership in its category provides significant advantages in retailer acceptance, sourcing scale, and consumer confidence. These capabilities allow the company to manage both rising and falling costs effectively. Consolidated results for the quarter showed revenue rising 13% to ₹3,897 crore, while EBITDA increased 27% to ₹709 crore. The reported EBITDA margin expanded from 16.2% to 18.2%.
Gross margins expanded by approximately six percentage points, driven by softer copra prices and a favorable portfolio mix. Marico reinvested a substantial portion of this gain into advertising and sales promotion, which rose to ₹451 crore from ₹313 crore. This spend is part of a broader shift to increase premium and digital-first categories from 37% of the global portfolio to a targeted 50% by FY30. The strategy aims to decouple the company's financial performance from commodity-linked volatility.
In the edible oils segment, Saffola recorded 6% revenue growth despite a high-single-digit volume decline. Marico attributed this to a deliberate strategy of reducing the supply of low-margin variants while focusing on premium products like cold-pressed oils. This shift illustrates the company's willingness to trade volume for better profitability. As part of its international expansion, Marico targets a 40% contribution from premium categories by FY30, seeking to evolve into a business capable of delivering strong growth across diverse commodity cycles.
Source: Open Magazine