Marico to hike product prices by up to 9%

Hair oil major Marico today said it will increase the prices of its products by up to nine per cent in a bid to offset high input costs.

The company is also planning to invest about Rs 60 crore during 2011-12 financial year in its capital assets.

The rates of copra, the raw material for coconut oil, were higher by 62 per cent during October-December tenure compared to the year-ago three months period and the company has increased the prices of its Parachute and Nihar brands several times in this fiscal.

"There has been continued upward pressure on input costs through January 2011. The company is thus in the process of taking another round of price hikes to the tune of 8-9 per cent," the company said in a filing to the Bombay Stock Exchange (BSE).

The company has last hiked the prices of the two brands in December and so far it has raised the rates by about 24 per cent.

"Whilst these increases may help to maintain the margin per unit volume in the same band, there may be a fall in the margin as a percentage to the higher sales realisation," it added.

Marico has also revised the rates of its edible oil brand, Saffola. The prices of two of its key inputs -- safflower oil and rice bran oil, witnessed about 3 per cent and 25 per cent increase, respectively over the corresponding quarter in the previous year.

"The company has taken price increases in select packs to compensate for this cost push," it said without giving any detail.

Going forward, the firm expects the input prices to ease during next fiscal. "With the easing of the cost pressure the company expects to regain a part of the lost margins," it added.

Talking about its capex plans for 2011-12 financial year, the company said it plans to invest about Rs 60 crore in capital assets.

"This estimate excludes any potential acquisition opportunities. The company's annual recurring capital expenditure is about Rs 20 crore per annum," it added.

Earlier in the day, the FMCG firm reported 11.78 per cent increase in its consolidated net profit for the quarter ended December 31, 2010 at Rs 69.53 crore. It had posted a net profit of Rs 62.20 crore in the same period 2009.

The net sales during the third quarter of this fiscal also jumped by 22.13 per cent to Rs 817.74 crore from Rs 669.57 crore in the year-ago period.