Marico's Digital Brands Achieve Over Rs 1,000 Crore in Annual Recurring Revenue

Marico's digital brands have surpassed the Rs 1,000 crore annual recurring revenue milestone. The FMCG giant anticipates that food and premium personal care will account for 25% of its India revenue, according to Managing Director and CEO Saugata Gupta. The company's digital brands, including Beardo, True Elements, Just Herbs, and Plix, offer a diverse range of products from premium personal care to food.

Gupta stated, "Our digital brands have crossed Rs 1,000 crore in ARR annual recurring revenue, and we expect the diversified portfolio...including premium personal care, to contribute at least 25 per cent to our overall India business, over the next three years." Beardo, a men's grooming brand under Marico, is nearing profitability with a double-digit EBITDA. Meanwhile, Plix, a D2C wellness brand, has reached break-even.

Growth and Profitability Goals

Marico aims to achieve a mid-to-high single-digit EBITDA for its brands. Gupta emphasised the importance of growing both in size and profitability. True Elements and Just Herbs are yet to break even. Over the next 18 months, Marico plans to ensure these brands reach break-even while continuing their growth trajectory.

The company has set a target of achieving 2.5 times the FY24 ARR and a 10% EBITDA by FY27. Marico's food business, which includes brands like Saffola and Coco Soul, has also crossed the Rs 1,000 crore ARR mark. Gupta expects the Foods category to return to over 20% growth by Q4 and maintain this momentum into Q1 of the next fiscal year.

Core Brands and Market Dynamics

Marico is optimistic about its core brands' performance in the upcoming fiscal year. As pricing stabilises and cost pressures decrease, Parachute is expected to resume growth. Value-added hair oils have shown a strong recovery, with double-digit growth anticipated over the next two quarters.

Gupta noted improvements in both urban markets and inflation rates. "The GST cut should further support in driving consumption," he said. Rural demand remains stable while urban markets are improving. The overall business environment is gradually getting better.

Financial Performance and Future Plans

In the September quarter, Marico reported a slight decline in consolidated net profit to Rs 432 crore due to a high base and inflation in key commodities. However, revenue from operations increased by 30.7% to Rs 3,482 crore. This was driven by a 7% underlying volume growth in India and a 20% constant currency growth internationally.

Marico has achieved a significant milestone by becoming a Rs 10,000 crore revenue company in FY25. The company now aims to double its revenue to Rs 20,000 crore by 2030. This ambitious goal reflects Marico's commitment to expanding its market presence over the next five years.

With inputs from PTI