Marico rises after Q4 PAT climbs 14% YoY to Rs 318 cr

Marico jumped 2.75% to Rs 531.05 after the FMCG company's consolidated net profit jumped 14% to Rs 318 crore in Q4 FY24 as compared with Rs 302 crore in Q4 FY23.

Revenue from operations increased 2% YoY to Rs 2,278 crore in Q4 FY24, with underlying volume growth of 3% in the domestic business and constant currency growth of 10% in the international business.

Profit before tax fell marginally to Rs 399 crore in Q4 FY24 as compared with Rs 401 crore posted in Q4 FY23,

EBITDA stood at Rs 442 crore in Q4 FY24, up 12% as compared with Rs 393 crore in Q4 FY23. EBITDa margin expanded by 186 bps to 19.4% in Q4 FY24 as against 17.5% in Q4 FY23.

Advertising & promotion (A&P) spends was up 8% YoY, as the Company sustained focus on strategic brand building of core and new businesses.

Domestic revenue was flattish at Rs 1,680 crore, as pricing corrections in key portfolios anniversarized to a larger extent on a sequential basis. Offtakes remained healthy across key portfolios with 75% of the business either gaining or sustaining market share and 100% of the business either gaining or sustaining penetration, both on MAT basis.

The international business delivered strong broad-based growth led by Bangladesh recovering quickly after facing transient headwinds in the preceding quarter and sustained momentum in most of the other markets.

The company said that it believes that the General Trade channel will continue to be source of scale and competitive advantage over the long term, especially in our core categories. Therefore, the company initiated a number of steps over the last few months, including implementing primary stock reduction and extended credit terms on selective basis to improve the profitability of partners and structurally revive growth in the channel.

In Q1 FY25, we have also rolled out Project SETU, laying a phased 3-year roadmap to improve our direct reach from approximately 1 million outlets currently to 1.5 million outlets in FY27.

The expected outlay by FY27 is Rs 80-100 crore. and will be funded through re-allocation of resources viz. by optimizing promotional spends and indirect distribution costs in wholesale channel, reduction in organized trade promotional spends and savings from improving process efficiencies and reducing wastages. Therefore, Project SETU will be cost neutral.

On outlook front, the company expects a gradual uptick in the growth of our core categories through the ongoing initiatives to enhance the profitability of our General Trade (GT) channel partners and transformative expansion in our direct reach footprint with the roll out of Project SETU. We continue to draw confidence from healthy offtakes and market share gains in our key portfolios.

It will continue its focus on driving differential growth in our urban-centric and premium portfolios through the organised retail and E-Commerce channels. Therefore, it expects to deliver consistent and competitive growth over the medium term through a much sharper and targeted portfolio and SKU strategy in each channel.

It will also continue to aggressively diversify the portfolio through the scale up of food and premium personal care portfolios, while improving profitability parameters in line with our medium-term strategic priorities.

It expects the domestic revenue share of the Foods and Premium Personal Care portfolios to expand from approximately 20% currently to around 25% by FY27. It will aim to replicate the Beardo playbook as it scales the digital-first franchises and achieves a double-digit EBITDA margin in the portfolio in FY27.

In the medium term, we aim to deliver double-digit revenue growth through consistent outperformance vis-vis the category and market share gains in the domestic core portfolios, accelerated growth in the Foods and Premium Personal Care and double-digit constant currency growth in the International business. We expect operating margin to inch up over the next few years with leverage benefits as well as premiumisation of the portfolios across both the India and International businesses.

Saugata Gupta, MD & CEO, commented, In the domestic business, we expect a gradually improving growth trajectory in the core categories through ongoing initiatives to enhance GT channel partner profitability and transformative expansion in direct reach via Project SETU, while we aggressively drive the profitable scale up of Foods and Digital-first brands

As the Bangladesh business regained its momentum, the ramp up in the MENA and South Africa businesses has visibly strengthened the growth construct of the International business. We will aim to deliver healthy revenue-led earnings growth in the near and medium term, aided by the positively evolving operating environment.

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.

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