L'Oréal India’s profit jumps 23% to Rs 597 Cr in FY25

L'Oréal India managed single-digit year-on-year revenue growth for the fiscal year ending March 2025. However, the Indian arm of the French cosmetics major increased its profit after tax (PAT) by 20% in FY25, approaching the Rs 600 crore threshold.

The company’s revenue from operations rose 6% to Rs 5,925 crore in the fiscal year ending March 2025, compared to Rs 5,576 crore in FY24, as per its financial statements filed with the Registrar of Companies (RoC).

The company made 96% of its revenue from the sale of products, which contributed Rs 5,687 crore to the operating revenue in FY25 which increased 6% from Rs 5,368 crore in FY24. Income from services, which includes contract research and innovation income along with service recharge income, grew 15.5% to Rs 234 crore.

Advertising expenses continued to dominate the cost structure, accounting for 32% of the overall spend, though it contracted 3% to Rs 1,663 crore in FY25 from Rs 1,714 crore in FY24. Cost of material consumed grew 6% to Rs 1,329 crore, making up 26% of the expenditure, while employee benefits rose 8.3% to Rs 576 crore during the last fiscal year.

Other expenses, including transportation and miscellaneous overheads, stood at Rs 1,445 crore during the year. Overall, total expenses inched up by just 2.8% to Rs 5,162 crore in FY25 from Rs 5,023 crore in FY24

With the company’s revenue growth outpacing expense, L'Oréal India increased its profit by 23% to Rs 597 crore in FY25. Its 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 earn a rupee of operating revenue in FY25, an improvement over Rs 0.90 in FY24. The company closed the last fiscal year with Rs 515 crore in cash and bank balances, while current assets grew to Rs 2,045.

The numbers are somewhat underwhelming, considering the high brand salience and visibility L'Oréal enjoys in India. Part of the reason might be the firm's reluctance to go for local acquisitions, although it has taken up minority stakes in Deconstruct and Arata through its venture arm. The faster profit growth over topline might be due to the trend towards super sizing we have seen in key categories like hair care, but L'Oréal will find it difficult to sustain beyond a point. The market, thanks to the sheer amount of choice available, has meant that the L’oreal brand is more a safe choice in the premium category than the aspirational brand it started off as. That is a recipe for steady, not strong growth, in a best case scenario.