L’Oréal India Reports Revenue Growth for Fiscal Year 2025

L’Oréal India has achieved single-digit year-on-year revenue growth for the fiscal year ending March 2025. The Indian division of the renowned French cosmetics giant saw its profit after tax (PAT) surge by 20% in FY25, nearing the Rs 600 crore mark.

The company’s operational revenue climbed by 6% to reach Rs 5,925 crore in the fiscal year ending March 2025, up from Rs 5,576 crore in FY24, as disclosed in its financial statements submitted to the Registrar of Companies (RoC).

Revenue Breakdown

Product sales constituted 96% of the total revenue, contributing Rs 5,687 crore to the operational revenue in FY25, a 6% rise from Rs 5,368 crore in FY24. Additionally, income from services, including contract research and innovation revenue, saw a 15.5% increase, reaching Rs 234 crore.

Expenditure Analysis

Advertising expenses remained a significant part of the cost structure, making up 32% of total expenditure, although they decreased by 3% to Rs 1,663 crore in FY25 from Rs 1,714 crore in FY24. The cost of materials consumed grew by 6% to Rs 1,329 crore, representing 26% of total costs, while employee benefits increased by 8.3% to Rs 576 crore during the last fiscal year.

Other expenses, which include transportation and miscellaneous overheads, amounted to Rs 1,445 crore for the year. Overall, total expenses saw a modest rise of 2.8% to Rs 5,162 crore in FY25 from Rs 5,023 crore in FY24.

Profit Growth and Financial Metrics

With revenue growth surpassing expenses, L’Oréal India recorded a profit increase of 23%, achieving Rs 597 crore in FY25. The return on capital employed (ROCE) and EBITDA margin stood at 86.85% and 15.57%, respectively.

On a per-unit basis, L’Oréal India spent Rs 0.87 to generate one rupee of operational revenue in FY25, showing an improvement from Rs 0.90 in FY24. The company concluded the past fiscal year with Rs 515 crore in cash and bank balances, while current assets rose to Rs 2,045 crore.

Market Position and Challenges

These figures appear a bit disappointing given the high brand visibility and recognition L’Oréal enjoys in India. One contributing factor may be the firm’s hesitation to pursue local acquisitions, despite holding minority stakes in Deconstruct and Arata through its venture arm. The quicker profit growth compared to the top line may be linked to trends towards larger product sizes in key categories such as hair care. However, sustaining this trend may pose challenges for L’Oréal. In a market with vast options available, the L’Oréal brand has transitioned from being an aspirational choice to a more secure option in the premium segment. This shift suggests a likelihood of steady, rather than robust, growth in the best-case scenario.