Marico gains after Q3 business update

Marico rose 2.40% to Rs 416.55 after the company said that the third quarter was characterized by a faster than expected recovery in consumer sentiment in India, aided by the festival season and a declining COVID-19 graph.

The company witnessed strong performance across its portfolio with general trade continuing to grow healthily and rural markets staying ahead of urban. In the new age channels, while E-Commerce continued the stellar run, modern trade after a soft first half, fared better in Q3. Canteen Stores Department (CSD) continued to decline, albeit improving sequentially.

Marico further said that the India business delivered a strong performance with double-digit volume growth. Revenue growth was in tandem with volume growth.

Parachute Coconut Oil delivered ahead of its medium-term aspiration. Saffola Edible Oils continued its growth momentum, delivering double-digit volume growth. Value Added Hair Oils also exhibited strength with a broad-based sharp recovery across sub segments leading to overall double-digit growth for the category.

The Foods portfolio continued to witness exponential growth in line with the near-term aspiration, backed by strong performance in both the base foods and the new product launches.

There was a steady revival in discretionary categories with the Premium Personal Care portfolios witnessing improving trends sequentially, however, still posting a modest decline on a year-on-year basis.

The company's International business had a resilient quarter with high-single digit constant currency growth, led by double-digit constant currency growth in Bangladesh and recovery in few other markets.

The quarter was also characterized by inflationary pressure in key raw materials necessitating cutting back of some promotions and taking effective price increases across both Parachute and Saffola edible oil portfolios.

"The company expects to deliver a healthy profit growth on the back of various cost optimization initiatives and judicious advertising and promotions (A&P) spends, Marico said in a statement.

It further said that the company maintains an optimistic outlook for the rest of the year provided the COVID and the economic situation continues to improve. The company remains steadfast in its medium-term aspiration of delivering sustainable and profitable volume led growth, building on strong brand equity across core franchisees and progressively driving and scaling up new engines of growth.

Marico is a leading Indian group in consumer products in the global beauty and wellness space. The company's net profit rose 6.9% to Rs 264 crore on a 8.7% increase in net sales to Rs 1,989 crore in Q2 FY21 over Q2 FY20.

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