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We prefer GCPL and Marico due to better execution, which resulted in a relatively better topline for the companies. We expect Q1FY26E revenue growth for GCPL to be 12% and for Marico at 21%. Raw material headwinds are likely to have a bearing on margins and earnings. At the same time, we remain concerned with Dabur’s execution, which likely led to its weak topline in Q1. We see low single digit topline growth for Dabur in Q1FY26E. With weak operating leverage and raw material inflation, we expect earnings to be stressed for Dabur in Q1FY26E. We maintain a BUY on GCPL (Jun-26E TP of Rs1,400, on 50x P/E), Marico (Jun-26E TP of Rs810, on 50x P/E), and a REDUCE on Dabur (Jun-26E TP of Rs450, on 37x P/E).

Marico: Robust topline continues; margin to keep earnings muted

Marico’s preview update is largely in line with our expectations, with growth likely to be low at ~20%; we expect 21% growth. A positive surprise is the double-digit growth in the VAHO portfolio (after 8 quarters). The company is concerned about coconut oil, where prices have seen a further inflation of 30% in June; the spot price is at Rs255/kg. Early rains impacted the copra drying process, leading to an unusual surge in prices. India volumes to see QoQ improvement. We now expect 8% volume growth, which is at a 15-quarter high. India revenue growth is likely to be ~25% YoY. The international business is likely to see high-teen constant currency (CC) growth. Given higher-than-usual inflation and sustained advertising and promotion spends, we expect Marico to report 3% EBITDA growth. The management expects gross margin pressure to ease in H2FY26.

GCPL continues to reap the benefits of better execution

India performance is expected to be in line with our estimates. We expect 7% revenue growth, with 4-5% volume growth. Double-digit growth in home care is reassuring, where early rains likely led to a better show in household insecticides. The personal care segment saw value growth in low single digits. Adjusted for volume decline in soaps, India volume growth would be in double digits. Indonesia’s performance is weak with flat volume growth; we expect flat revenue YoY. The GAUM cluster is likely to be stronger than expected; we expect 22% growth (vs low double-digit expected earlier). Consolidated revenue is likely to see healthy, ~10% YoY, growth. We see RM headwinds in India hurting OPM, and expect 22% margin (down 250bps YoY, 50bps QoQ). Indonesia, amid competition, would see weak margin; we expect flat margin YoY at 23%. Improved margins in GAUM to keep profit growth healthy. Consolidated EBITDA is likely to see modest 2% growth, while the lower tax rate would aid 7% earnings growth.

Dabur’s weak show to continue in Q1FY26E

In line with our expectations, Dabur’s commentary for Q1 was weak. Select segments did well in India with share gains, but weakness in the others dented the overall performance of home and personal care, which saw modest improvement in growth (estimate 1% growth) from Q4FY25 (3% decline). The beverage portfolio would see a decline; amid early rains, we estimate a contraction in high single digits. India business is likely to see 2% sales decline in Q1FY26E, in our view. The international business saw double-digit CC growth; we expect reported growth to be 12%. Consolidated revenue is likely to see low single digit growth; EBITDA may lag revenue growth. We see a 6% decline due to steady inflation in the RM basket and negative operating leverage, though sales mix was likely better. We see EBITDA decline leading to a 6% drop in earnings.

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