Marico Limited: history, ownership, mission, how it works & makes money

A Brief History of Marico Limited

Marico Limited, established in 1990, is a leading consumer goods company based in India, primarily focusing on beauty and wellness products. The company's journey began with the launch of its flagship brand, Parachute Coconut Oil, which has since become a household name. By 1995, Marico had diversified its product offerings with the introduction of Saffola, a brand positioned in the health food segment.

Throughout the late 1990s and early 2000s, Marico expanded its portfolio through both organic growth and strategic acquisitions. In 2000, it acquired the brand "Hair Code," and in 2001, the company further strengthened its market position by acquiring "Nihar," another hair care brand.

In fiscal year 2021-22, Marico reported a consolidated revenue of ₹9,426 crore, marking a growth of 16% compared to the previous year. The company's net profit for the same period was ₹1,320 crore, reflecting a profit margin of approximately 14%. The revenue from international markets contributed about 29% to the total revenue, showcasing Marico's commitment to expanding its global footprint.

Marico's product categories include hair care, skin care, edible oils, and health foods. As of October 2023, the company’s major brands include:

• Parachute
• Saffola
• Hair & Care
• Livon
• Set Wet
• Breeze

In recent years, Marico has focused on sustainability and innovation within its product lines. In FY 2022-23, the company introduced several new variants under its existing brands, which contributed to a 11% growth in volume terms across its key categories.

Marico's stock performance has also been noteworthy. As of October 2023, the company’s shares were trading at approximately ₹590, with a market capitalization of around ₹54,000 crore. The stock has shown a year-to-date growth of approximately 20%.

The company's employee strength as of 2023 stands at around 3,000, reflecting its commitment to a skilled workforce that drives innovation and operational efficiency.

In terms of corporate governance, Marico Limited is dedicated to maintaining high standards. The company has been recognized multiple times for its commitment to sustainability and ethical business practices, further solidifying its position in the consumer goods sector.

A Who Owns Marico Limited

Marico Limited, an Indian consumer goods company, primarily operates in the beauty and wellness space. As of the latest available data, Marico's ownership structure reflects a mix of institutional and individual shareholders.

Shareholder Composition

The promoter group, led by Mr. Harsh Mariwala, holds a substantial portion of the company. This strong promoter ownership often indicates a commitment to the long-term vision of the company.

Key Promoters

• Mr. Harsh Mariwala (Chairman & Founder)
• Mrs. Rukmini Harsh Mariwala
• Mr. Aashish Mariwala

In addition to individual promoters, institutional investors have become increasingly influential in the company's governance and strategy. The presence of both domestic and foreign institutional investors underlines Marico's appeal as a stable investment option.

Recent Shareholding Trends

According to the latest quarterly filings, the overall shareholding of foreign institutional investors showed an increase of 2.5% over the last year, indicating growing international confidence in Marico’s performance.

Stock Performance

As of October 2023, Marico's share price stood at approximately INR 500, representing a year-to-date increase of 15%. The company's market capitalization reached around INR 67,000 crore.

Financial Highlights

Marico's robust financial results, highlighted by a revenue growth of 12% year-on-year, underscore its resilience and adaptability in a competitive market. The company's strong ROE indicates effective management of equity capital.

Conclusion on Ownership Dynamics

Overall, the blend of promoter and institutional ownership suggests a balanced approach to governance and operational strategy. The company's solid performance metrics further enhance its attractiveness to a diverse range of investors.

Marico Limited Mission Statement

Marico Limited, a leading consumer goods company in India, focuses on health and beauty products. Its mission statement reflects a commitment to fostering a better life for consumers by providing high-quality products. The company aims to enhance the lives of its customers through innovative value-added products and brands.

As of the fiscal year 2022-2023, Marico reported consolidated revenues of ₹9,846 crore, with a net profit of ₹1,362 crore. The company’s consistent focus on core values and consumer satisfaction is aimed at sustainable growth in the market.

Key Elements of the Mission Statement

• Innovation: Continuous development of products tailored to consumer needs.
• Quality: Commitment to offering high-quality products.
• Health and Wellness: Focus on promoting health and wellness through product offerings.
• Sustainability: Integration of sustainable practices in operations and product development.

Financial Performance Overview

Marico’s focus on innovation is evident from its investment in research and development, which stood at ₹72 crore for the financial year 2022-2023. The company continues to expand its product portfolio, with brands like Parachute, Saffola, and Hair & Care becoming household names in India and abroad.

Market Position and Brand Strategy

Marico has a strong market presence, particularly in the edible oils and hair care segments. For instance, Parachute Coconut Oil holds approximately 43% market share in the coconut oil category. Saffola, its flagship brand in the health foods segment, commands around 21% market share in the refined edible oils sector.

The company’s distribution network is extensive, comprising over 5 million outlets across India. Marico's products reach consumers through both traditional retail and modern trade channels, ensuring wide accessibility.

Global Expansion and Sustainability Efforts

Marico has strategically expanded into international markets, with operations in over 25 countries, including Bangladesh, Egypt, and South Africa. The international business contributed approximately 23% to total revenues in the latest fiscal year.

As part of its sustainability initiatives, Marico aims to reduce its carbon footprint by 30% by 2025. The company has also committed to sourcing 100% of its palm oil from certified sustainable sources by the end of 2023.

Marico Limited's mission statement serves as a guiding principle for its operations, driving both growth and innovation while maintaining a strong commitment to sustainability and consumer health.

How Marico Limited Works

Marico Limited is an Indian multinational consumer goods company, primarily engaged in the production of personal care and food products. As of the fiscal year 2023, Marico reported revenues of approximately ₹8,448 crores, showcasing a growth of 9% in comparison to the previous fiscal year. The company's market capitalization stands around ₹54,000 crores, reflecting its robust performance in the consumer goods sector.

Marico operates across various segments, with notable brands like Parachute, Saffola, and Hair & Care. The company's portfolio is split between its personal care segment, which constitutes about 59% of total revenue, and its foods and other segments, making up approximately 41%.

The company employs a diverse distribution strategy, utilizing both modern trade and traditional channels. As of March 2023, Marico reported a distribution network of over 7 million outlets across India, enhancing its reach and market penetration.

Marico’s growth strategy is largely driven by innovation, product development, and effective marketing. The company has invested around ₹200 crores in research and development in 2022-2023 to enhance its product offerings and meet changing consumer preferences.

In terms of profitability, Marico reported an operating profit (EBITDA) margin of 21% for the fiscal year 2023, indicating a healthy margin despite rising raw material costs. The net profit for the year stood at ₹1,292 crores, representing a growth of 8% year-on-year.

Furthermore, Marico is focused on sustainability, with initiatives aimed at reducing its carbon footprint and waste. In 2022, the company achieved a reduction in water usage by 29% per unit of production compared to 2021.

Marico's capital allocation strategy includes both reinvestment into the business and return of capital to shareholders. The board declared a dividend of ₹1.50 per share for the fiscal year 2023, with a dividend payout ratio of approximately 45%.

As part of its expansion strategy, Marico has also increased its presence in international markets, with operations in over 25 countries. The international business contributed to around 22% of total revenue in FY 2023, highlighting significant global footprints.

Marico's effective cost management strategies have allowed it to maintain competitive pricing while investing in growth. The company has reported a return on equity (ROE) of 32%, which is significantly higher than the industry average of 15%.

Overall, Marico Limited operates through a combination of strategic brand management, broad distribution networks, and a commitment to innovation, positioning itself as a leader in the consumer goods industry.

How Marico Limited Makes Money

Marico Limited, an Indian consumer goods company, primarily generates revenue through a diversified portfolio in personal care and food products. The company's major brands include Parachute, Hair & Care, and Saffola. As of the fiscal year ending March 2023, Marico reported a total revenue of ₹9,157 crore, reflecting a growth of 9% year-on-year.

Revenue Segments

Marico's revenue can be divided into several key segments:

• Hair Care: Contributes approximately 43% of total revenue, driven by brands like Parachute and Hair & Care.
• Skin Care: Accounts for around 12%, featuring brands such as Nihar Naturals.
• Edible Oils: Approximately 29%, primarily through the Saffola brand.
• Health Foods: Represents about 12%, led by Saffola Oats and Saffola Fittify.

The following table summarizes Marico's revenue by segment for the fiscal year ended March 2023:

Financial Performance

Marico's net profit for the fiscal year 2023 stood at ₹1,393 crore, representing a growth of 6% compared to the previous year. The operating margin was reported at 17.5%, highlighting the company's efficiency in managing its costs amid rising raw material prices.

The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) increased to ₹1,603 crore, with an EBITDA margin of 17.5%.

Market Strategy and Growth Initiatives

Marico employs various strategies to enhance its revenue streams:

• Geographic Expansion: Increased penetration in international markets, particularly in Bangladesh and the Middle East.
• Product Innovation: Introduction of new products like Saffola Honey to diversify the Saffola brand portfolio.
• Digital Marketing: Enhanced online presence and e-commerce initiatives driving sales growth, particularly during the pandemic.

In the fiscal year 2023, Marico's international business contributed approximately 28% to total revenue, showcasing notable growth from ₹2,042 crore in FY 2022 to ₹2,616 crore in FY 2023.

Cost Management

Marico has implemented several cost efficiency measures, helping maintain margins despite input cost pressures. The company reported a reduction in raw material costs by approximately 4% in FY 2023.

Key raw material inputs such as palm oil and coconut oil, which are crucial for their product manufacturing, have seen price fluctuations. Marico's strategic sourcing and hedging mechanisms have played an essential role in managing these costs effectively.

As of the latest quarter ending June 2023, Marico's stock was trading at approximately ₹525, with a market capitalization of around ₹63,000 crore.

The company’s price-to-earnings (P/E) ratio was reported at 45.6 as of Q1 FY 2024, indicating a premium valuation compared to industry averages.