Marico spurts after India biz clocks volume growth in Q2

Marico jumped 4.46% to Rs 378 after the company said that India business registered robust volume growth in the Q2 September 2020 while the international business clocked mid-single digit constant currency growth.

The FMCG major said the quarter was characterized by a partial revival of consumer sentiment, which also reflected in the company's performance across portfolio and channels.

Rural continued to perform better than urban aided by government's focused relief packages, relatively lower impact of the pandemic, the resilience of the agricultural sector in a declining GDP context and the consumption shift due to reverse migration of labour.

Although there were intermittent supply chain disruptions across locations due to localized lockdowns, the distribution network has rebounded back to near pre-COVID levels.

Traditional trade and e-commerce continued to drive growth. While Modern trade fell behind, it did improve sequentially. Canteen Stores Department (CSD) continued to witness steep decline.

India business witnessed signs of revival in consumer demand in the core categories contributing more than 90% of the business and registered robust volume growth in the quarter.

The international business has clocked mid-single digit constant currency growth. Bangladesh continued to lead from the front with double digit growth while other markets have shown improvement sequentially.

During the quarter, the company upped the investments behind brand building and advertisement spends were back to pre-COVID levels.

"Although the key raw materials have seen an inflationary trend towards the end of the quarter, we expect to deliver healthy earnings growth on the back of a robust volume growth and a host of cost saving initiatives," Marico said.

As lockdown restrictions are progressively easing, the Company maintains a positive outlook for the rest of the year provided the ongoing health crisis does not escalate further and economic activity revives steadily, it added.

Marico is a leading Indian group in consumer products in the global beauty and wellness space.

The FMCG major's consolidated net profit rose 23.17% to Rs 388 crore on 11.13% decline in revenue to Rs 1,925 crore in Q1 June 2020 over Q1 June 2019.

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