Marico India biz posts low single-digit volume growth in Q2FY23

The FMCG company said that the India business posted low single-digit volume growth with the 3-year CAGR in high single digits.

Marico stated that in India, demand sentiment trended on similar lines as the preceding quarter during most of the quarter, with some signs of positivity in the last month. With retail inflation holding firm, downtrading in rural was still prevalent during the quarter. Urban and premium discretionary segments continued to fare better.

During the quarter, Parachute Coconut Oil recorded low single digit volume decline, although staying close to the medium term growth aspiration on a 3 year CAGR basis. Value Added Hair Oils grew in low single digits in value terms and Saffola Oils recovered smartly with high single digit volume growth on a normalised base.

While Foods grew in the mid-twenties with a broad based performance, Premium Personal Care maintained its positive momentum, the company said.

The International business maintained its strong run, delivering double-digit constant currency growth. Each of the markets contributed positively, despite global macro and geo-political uncertainties.

Consolidated revenue in the quarter grew in low single digits on a year-on-year basis.

Among key inputs, copra prices were softer than expected during the quarter, while edible and crude oil prices also corrected sequentially. Edible oil prices are likely to trend lower over the next few months. The company passed on the benefit of falling input prices to protect volumes and market share, even while consuming relatively higher cost inventory during the quarter.

Some of the geographies witnessed sharp currency depreciation, which is also expected to have some bearing on profitability. As a result, gross margin is expected to contract sequentially, but should end up higher on a year-on-year basis.

Advertising & promotional (A&P) spends grew in double-digits on a year-on-year basis, as the company maintained investments towards strategic brand building of core and new franchises. Therefore, operating margin is expected to near the levels of the corresponding quarter last year. Net profit will be further impacted by higher effective tax rate (ETR).

The company said that consumption trends should improve in the second half of the fiscal given retail inflation is expected to cool off as a result of government interventions, moderating commodity inflation pressures and reasonably healthy spatial distribution of monsoons. Higher crop realisations and the upcoming festive season should also provide a fillip to overall sentiment.

Marico is one of India's leading consumer products companies in the global beauty and wellness space. Its portfolio includes brands such as Parachute, Saffola, Saffola FITTIFY Gourmet, Saffola ImmuniVeda, Saffola Mealmaker, Hair & Care, Parachute Advansed, Nihar Naturals, Mediker, Coco Soul, Revive, Set Wet, Livon and Beardo.

The company reported 3.3% rise in consolidated net profit to Rs 377 crore on a 1.3% increase in revenue from operations to Rs 2,558 crore in Q1 FY23 over Q1 FY22.

The scrip shed 0.79% to currently trade at Rs 524.35 on the BSE.

Powered by Capital Market - Live News