Marico 2Q26 PreQ update – Another qtr of very strong topline delivery across segments; margins decline sharply, likely bottoming

* Consol revenue: c.30% growth YoY (2Q25: +8% YoY) led by pricing

* Domestic volume growth in high-single digits, while moderating QoQ (1Q26: +9% YoY, 2Q25: +5% YoY)

* Demand trends stable for most of 2Q. India business saw steady momentum in July-Aug; absorbed transitory impact of trade channel disruption ahead of GST cut implementation. 30% of Marico’s India business benefited from GST cuts.

* Parachute (c.33%/28% of India/consol sales): Volume decline in low-single digits (2Q25: +4% YoY, 1Q26: -1% YoY) despite effective price hikes of c.60% YoY. Volumes flattish YoY after adjusting for ml-age cuts in lieu of price hikes

* VAHO (c.19%/14% of India/consol sales): Growth in high-teens (2Q25 sales: -8% YoY). MRCO expects to maintain healthy growth momentum near/medium-term driven by (1) strategic focus in mid- and premium segments, (2) enhanced direct reach driven by Project SETU and (3) GST cut

* Saffola oil (c.19%/14% of India/consol sales): High-teens’ revenue growth (2Q25: +2% YoY); volume flattish

* Foods, PPC, digital-first brands (c.22%/18% of India/consol sales) maintained accelerated scale-up (foods 2Q25 value: +28% YoY)

* Int’l business (c.25% of consol sales): CC growth at c.20% YoY (2Q25: +13% YoY). Bangladesh, MENA outperformed

* GPM: MRCO expects incremental pressure on GPM (1Q26: 46.9%, 2Q25: 50.8%) on (1) copra range-bound at high levels (post 10-12% correction) & (2) veg oil costs at sustained high levels

* MRCO expects GPM pressure to ease from 2H26

* EBITDA: Modest growth YoY (2Q25: +5% YoY) with sustained brand investments and discounts to channel partners on pipeline inventory over 2 weeks in Sept. (EBITDA gr of 2% YoY implies OPM decline of 410bps YoY to 15.5% (2Q25: 19.6%, 1Q26: 20.1%))

* At CMP of Rs 710, stock trades at P/E of 43x on FY27E EPS. We have a Buy rating with TP of Rs 830.