Marico has reported a 20.3% YoY increase in the consolidated net profit for the quarter ended March to Rs 302 crore, despite a muted growth in the revenue. Revenue from operations rose margianlly by 4% YoY to Rs 2,240 crore – as reported in ET.
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The company reported its earnings after markets closed. The stock ended 0.7% down at Rs 493.60 on the National Stock Exchange.
Consolidated operating profit for the quarter rose 14% YoY to Rs 393 crore, and margins expanded 153 basis points to 17.5%.
The ‘Parachute’ oil brand owner saw a 5% on year growth in volumes for the domestic business. The volume growth is ahead of the industry growth of 3% in the quarter.
For FY23, Marico reported a 6.3% YoY rise in consolidated net profit to Rs 1,302 crore, and a nearly 3% growth in the topline to Rs 9,764 crore.
However, Marico is optimistic about its performance in the current financial year amid recovery in domestic volumes and revenue growth trajectory.
Marico’s international business reported a 13% YoY growth in revenue in constant currency terms in FY23 compared to 16% growth a year ago. It is confident of maintaining the growth in double digits in FY24 as well.
Cost Math
Raw material costs make for more than 50% of the total expenses for Marico. Input costs as a percentage of sales, however, dipped in the March quarter from the December quarter. It stood at 52.6% in Q4 compared to 55% in Q3.
However, advertising and promotional spends as a percentage of sales went up to 9.4% from 8.9% in Q3.
Other expenses as a percentage of sales also inched higher to 12.9% in Q4 from 11.1% in Q3.
India Performance
Marico’s domestic revenue rose a mere 2% YoY to Rs 1,683 crore, and lost 5% volume growth, due to price cuts taken in Parachute coconut oil and Saffola edible oils in response to the falling input prices.
“However, consistent focus on strengthening brand equity across portfolios and execution translated into 90% of the portfolio either gaining or sustaining market share,” the company said in a release.
Parachute Rigids posted a 9% volume growth amid the normal course of loose to branded conversions as stability in consumer pricing and copra prices prevailed through the quarter.
Value added hair oils ended the year on a rather positive note with value growth of 13% in Q4, driven by volumes.
Saffola edible oils witnessed mid-single digit volume decline on a high volume base sustained during the outbreak of the Omicron variant of COVID-19 last year. However, the franchise continued to witness healthy offtake growth during the quarter.
“In the domestic business, we will drive volume led growth and market share gains across our portfolios, aided by distribution expansion, aggressive cost controls and adequate investment in market development and brand building,” the company said.
It expects a gradual uptick in revenue growth as pricing interventions come into the base in the first half of FY24.
International Business
The international business had another stellar quarter, as it delivered constant currency growth of 16%, weathering the global macroeconomic uncertainty and currency devaluation headwinds in some of the geographies.
Each of the regions posted a strong performance, reflecting the underlying strength of the businesses. In Bangladesh, the company expects double-digit constant currency growth over the medium term, given its competitive position and significant growth headroom in the market. In Vietnam, the expansion into the female personal care category is expected to provide a fillip to the business in the medium term. In South Africa, the company expects to protect the core franchise of ethnic hair care and health care over the medium term.
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“The international business has consistently been delivering a resilient performance despite macroeconomic challenges in some of the geographies. We are confident of maintaining the double-digit growth momentum in FY24,” Marico said.