Marico has reduced prices of its flagship Parachute coconut oil brand after a sharp correction in copra prices, the key raw material used in coconut oil manufacturing. Distributor checks indicate that the company has cut the price of its 1-litre Parachute Coconut Oil pack by 16.7% in June, bringing it down to Rs 450 from Rs 540 earlier.
The move comes as copra prices have declined nearly 20% quarter-on-quarter following improved crop yields and better supply conditions. The correction follows an unprecedented surge in copra prices during the second quarter of FY26, when prices had nearly doubled year-on-year due to supply constraints and adverse weather conditions in key coconut-growing regions.
Industry experts say the recent fall in copra prices has provided Marico room to reprice its coconut oil portfolio and pass on some of the benefits to consumers. Coconut oil manufacturers had earlier undertaken multiple rounds of price hikes as raw material costs surged, leading to significant inflation in the category over the past year.
Copra is the most critical input for coconut oil production, accounting for a substantial portion of manufacturing costs. As a result, fluctuations in copra prices have a direct impact on pricing strategies and profitability for coconut oil makers.
Parachute remains one of the most important brands in Marico's portfolio. Analysts estimate that the Parachute franchise contributes nearly 32% of the company's overall revenue. Despite being a relatively mature category, the brand continues to be a major earnings driver, operating at EBITDA margins of around 19-20%.
While Marico has lowered prices in its core coconut oil business, the company has simultaneously raised prices in parts of its value-added hair oil portfolio due to inflation in other input costs.
Distributor checks show that the price of Jasmine hair oil has been increased by 11.1% in June. The 90 ml pack now costs Rs 50, compared with Rs 45 earlier, reflecting a Rs 5 increase.
The price hike comes amid rising paraffin costs, which have put pressure on the economics of value-added hair oils. Paraffin is a key ingredient used in several hair oil formulations and has witnessed an upward trend in recent months, prompting companies to recalibrate pricing.
Value-added hair oils represent another important growth segment for Marico. The category contributes approximately 13% of the company's revenue and typically delivers EBITDA margins of over 20%, making it more profitable than several other segments within the portfolio.
The contrasting pricing actions highlight the divergent cost trends across Marico's product categories. While falling copra prices are providing relief in the coconut oil business, inflation in paraffin and other inputs continues to weigh on the value-added hair oil segment.
Going forward, investors will closely monitor commodity price movements and their impact on Marico's margins, volume growth, and pricing strategy. The recent reduction in coconut oil prices could support demand recovery in the mass segment, while selective hikes in premium hair oils may help protect profitability amid ongoing input cost pressures.
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