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| Marico Q4 net up 10% year-on-year |
| BS Reporter / Mumbai Apr 23, 2009, 00:39 IST |
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Beating market expectations, Fast-Moving Consumer Goods (FMCG) player Marico registered an increase in consolidated net profit of 10 per cent for the quarter ended March 31. The figure touched Rs 44 crore as compared with Rs 40 crore in the corresponding quarter last financial year.
The company would have recorded a 97 per cent increase in net profit during the quarter under review, had there been no one-time extraordinary adjustment. Revenue for the fourth quarter rose 20 per cent to touch Rs 561 crore, against Rs 466 crorein the corresponding quarter of the previous financial year. Of the 20 per cent, 9 per cent was value growth, while 11 per cent was volume growth.
As for the sequential growth (compared with the previous quarter), Marico’s net profit dipped 14 per cent, while its revenue fell 10 per cent. This was primarily due to the fact that during the quarter, the company incurred a one-time exceptional loss of Rs 15 crore from the sale of its spa products and business brand in the US. For the full year, the company’s net profit of Rs 189 crore showed an increase of 12 per cent over the FY08 figure of Rs 169 crore. Its net profit would have been higher at 16 per cent if gains and losses from extraordinary items had not been considered.
“We expect volumes to drive our growth in the coming quarter. We expect to improve our profitability,” said Milind Sarwate, chief HR and strategy officer. He added :“We concentrated on acquiring consumers as opposed to margins and this focus on fundamentals has paid off.” Marico’s stock rose 5.3 per cent to close at Rs 67.10 on the Bombay Stock Exchange (BSE).
Known for its brands like Parachute and Saffola, besides its beauty and wellness services brand Kaya, Marico’s year-on-year revenues grew 25 per cent, with sales of Rs 2,388 crore for FY09, against Rs 1,905 crore in FY08. Volume and value growth contributed equally to top-line growth.
For the year, the consumer products business grew at 20 per cent uniformly, whereas Kaya’s turnover grew 57 per cent year-on-year on opening 20 new clinics during the year, taking the total number of skin clinics to 85 in India and West Asia. Marico’s international consumer products turnover grew 43 per cent during FY09.
Despite a large number of launches like Parachute Advanced Night Repair Cream, Parachute Advanced Revitalizing Hot Oil, functional foods, snacks and rice under Saffola and expansion of its Kaya Skin Clinics during the year, the company’s advertising and marketing spending grew at a marginal two per cent year on year and saw a dip of 20 per cent for the quarter ended March 31, 2009, over the corresponding quarter in the previous year.
The cutback on advertising costs has helped the company’s margins expand, say analysts. “The company’s margins for the quarter have increased 330 bps. This increase has largely been on account of a drop of 550 bps in its advertising expenses,” Anand Shah, FMCG sector analyst with Angel Broking, told Business Standard.
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