Marico's profit growth trails sales as operating margin slips
Expenses grew faster than revenue, while a lower tax rate supported net profit; the stock's initial gain was modest against its results-day history.
Filed 05 May 2026, 23:06 IST · after market close · Marico Ltd (MARICO)
Key takeaways
- Consolidated revenue grew +22.09% YoY, but expenses grew faster at +23.77%, reducing operating margin by 1.15 percentage points.
- Net profit rose +18.26% YoY to Rs 408 cr, helped by a 2.72 percentage-point fall in the tax rate, while other income contributed 11.90% of pre-tax profit.
- The stock gained +0.94% on the first session after results, below its 3.51% median absolute move across the last eight result reactions.
Price around the results
Sales growth did not fully reach operating profit
Consolidated revenue increased +22.09% YoY, but operating profit grew only +13.76% as expenses rose faster than sales. Sequentially, revenue fell -5.77% and operating profit declined -11.99%, pointing to weaker operating leverage in Q4FY26.
Margin pressure returned after Q3's recovery
Operating margin narrowed 1.15 percentage points YoY and 1.11 percentage points QoQ because costs grew faster than revenue in both comparisons. The margin had improved from 16.08% in Q2FY26 to 16.74% in Q3FY26, but fell to 15.63% in Q4FY26; it remains below the 16.75% median for 26 reported FMCG peers. Interest expense also rose +41.67% YoY and +21.43% QoQ.
Lower tax rate and other income lifted reported profit
Net profit grew +18.26% YoY, despite the operating-profit increase being smaller, as the tax rate fell 2.72 percentage points to 19.05%. Other income represented 11.90% of pre-tax profit, so part of the reported earnings growth came from non-operating income rather than operations.
Market reaction was positive but not unusual
The stock rose +0.94% on the first session after the consolidated results, with a +3.25% cumulative move after five sessions. That response was within the company's recent pattern: five of the last eight result reactions were positive and three were negative, with a 3.51% median absolute move.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹3,333 cr | ₹3,537 cr | -5.77% | +22.09% |
| Other income | ₹60 cr | ₹39 cr | +53.85% | +27.66% |
| Expenses | ₹2,812 cr | ₹2,945 cr | -4.52% | +23.77% |
| Operating profit | ₹521 cr | ₹592 cr | -11.99% | +13.76% |
| Operating margin (%) | 15.63% | 16.74% | — | — |
| Interest | ₹17 cr | ₹14 cr | +21.43% | +41.67% |
| Depreciation | ₹60 cr | ₹50 cr | +20.00% | +15.38% |
| Profit before tax | ₹504 cr | ₹567 cr | -11.11% | +14.29% |
| Tax | ₹96 cr | ₹107 cr | -10.28% | +0.00% |
| Net profit | ₹408 cr | ₹460 cr | -11.30% | +18.26% |
| EPS (₹) | ₹3.04 | ₹3.45 | -11.88% | +14.72% |
Operating margin of 15.63% compares with a Fast Moving Consumer Goods sector median of 16.75% across 26 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +0.94% | -0.30% |
| Next session | +3.09% | — |
| 5 sessions | +3.25% | +5.83% |
| 15 sessions | +3.30% | — |
| 30 sessions | +1.68% | — |
Volume on the results session was 2.78× its 20-day average.
What to watch
- Whether operating margin recovers from 15.63% after the Q4FY26 decline.
- Whether expense growth falls below revenue growth after the +23.77% versus +22.09% YoY gap.
- Whether other income remains near 11.90% of pre-tax profit.