The personal products company posted 12% year-on-year (YoY) declined in net profit at Rs 232 crore, while operational revenue fell 4% YoY to Rs 1,692 crore, over the previous year quarter.
Analysts on an average had expected net profit of Rs 254 crore on revenues of Rs 1,743 crore.
“For the quarter Q1FY18, India business witnessed volume decline of 9% on the backdrop of destocking by trade in June due to Goods & Service Tax (GST) transition. The volume decline is attributable to steep pipeline correction across channels, especially wholesale and rural, leading to a decline in the stock turnover ratios (STRs) in trade,” Marico said in a press release.
The margins saw a decrease this quarter due to significant increase in the input costs but company chose to hold back the price increase in Parachute Rigids portfolio. In the near term, the input costs are likely to rise further. The Company will revisit the prices in the near term. The focus on a balanced approach towards volume growth and profitable margins will continue. In the medium term, the Company would be comfortable at around plus 20% EBITDA (earnings before interest, taxation, depreciation and amortisation) margins, it added.
For the rest of the year, the company is targeting 8-10% volume growth and healthy market share gains, backed by increased investment in Core Portfolio, aggressive new product launches, distribution expansion, judicious call on pricing and tighter cost management.
At 02:15 pm; the stock was down 4% at Rs 320, as compared to 0.11% rise in the S&P BSE Sensex. The trading volumes on the counter more than doubled with a combined 3.48 million shares changed hands on BSE and NSE so far.