Marico’s digital brands cross Rs 1,000 Cr annual recurring revenue mark: CEO Saugata Gupta

Marico's digital brands have crossed the Rs 1,000 crore annual recurring revenue mark, and the FMCG major expects food & premium personal care to contribute 25% of its India revenue, its Managing Director and Chief Executive Officer, Saugata Gupta, said.

Marico's digital brands—including Beardo, True Elements, Just Herbs, and Plix—have a diversified portfolio, ranging from premium personal care products to food, and are on a high growth momentum and likely to continue their faster pace, he added.

"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% to our overall India business, over the next three years," Gupta told PTI.

Beardo, its men's grooming brand, has almost turned profitable, delivering a double-digit EBITDA, and its D2C wellness brand Plix has achieved break-even, he said.

"Our objective is to immediately take it to a mid-single-digit to high single-digit EBITDA," Gupta said, adding that the aim is "to grow well, and at the same time, grow profitably".

The company's healthy food brand True Elements and Just Herbs, which operate in Ayurvedic beauty and personal care, have still not reached the break-even point, he added.

"So, over the next 18 months, we need to ensure they break even and continue to grow. Our objective of achieving 2.5x of FY24 ARR and a 10% EBITDA by FY27 remains intact," he said.

Besides, Marico's food business, in which it operates with brands like Saffola and Coco Soul, has crossed the Rs 1,000 crore ARR mark.

"We expect the Foods category to return to over 20% growth by Q4 and also continue that momentum into Q1 next fiscal year. Our focus remains on ‘fewer, bigger, better, and relevant’ for the food business, as we have learned that scale drives profitability," Gupta said.

Over the last two years, Marico has improved gross margins by 1,000-bps in this and has plans to continue this journey. 

"It's critical that the diversified part of our portfolio not only drives top-line growth but also becomes significantly profitable," Gupta pointed out.

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Besides, Marico also expects good performance from its core brands by the next fiscal year. 

"We also expect an improvement in the growth of our core brands as we move into next year. As the pricing normalises and cost pressures ease, Parachute should return to growth," he said, adding that "value-added hair oils have seen a strong turnaround, and we are confident of delivering double-digit growth over the next two quarters".

According to Gupta, there has been an "improvement in the urban market" and "inflation has come down".

"Overall, the landscape is improving, and the environment is gradually getting better. Rural demand has been fairly stable, and urban markets are also showing improvement. The GST cut should further support in driving consumption," he said.

In the September quarter, Marico had reported a marginal decline in its consolidated net profit to Rs 432 crore on account of a high base and inflation in key commodities.

However, its revenue from operations rose 30.7 per cent to Rs 3,482 crore, helped by an underlying volume growth of 7 per cent in the India business and constant currency growth of 20% in the international business.

Marico, which has crossed the milestone of becoming a Rs 10,000 crore revenue company in FY25, is aiming to be a Rs 20,000 crore firm by 2030, growing its revenue two-fold in the next five years.