Marico Q2 net up 10%

Consumer products major Marico reported a 9.68 per cent increase in net profit to Rs 85.87 crore for the quarter ended September 30, 2012 on the back of strong sales growth in the consumer products division. Its net profit for the corresponding period a year ago was Rs 78.29 crore.

Net sales grew 19 per cent to Rs 1,155.89 crore for the quarter under review as against Rs 967.40 crore last year.

Marico's board, which met on Friday, approved an interim dividend of 50 per cent on its equity share capital of Rs 64.45 crore.

Its consumer products business (CPB) achieved a turnover of Rs 793 crore during the quarter - up about 19 per cent over same period last year, while the international business grew 16 per cent and Kaya by 38 per cent respectively.

 

In consumer products, Parachute grew by nine per cent during the quarter, while Saffola grew by six per cent and the value-added hair oils portfolio grew 20 per cent, Chaitanya Deshpande, executive vice-president, and head, investor relations and M&A, Marico said.

The acquired brands of Set Wet, Zatak and Livon grew by 28 per cent during the quarter, with the company now focusing on improving distribution and reach of the brands. "In the first quarter of the current fiscal, Reckitt was still manufacturing the brands as part of the agreement, which has now moved to us," Deshpande said. "We now propose to focus on the marketing and distribution of the products," he said.

The first phase of the relaunch of the products has also kicked off with the company releasing a new campaign for Set Wet in the second quarter. Livon and Zatak will be refurbished going forward, Deshpande added.

Thanks to the advertising focus on the acquired and existing brands, Marico's ad spends as a percentage of sales during the quarter stood at 13 per cent - up nearly 400 basis points over last year when ad spends were 9.3 per cent of sales.

Deshpande said that the environment remained challenging with discretionary categories likely to continue seeing a slowdown.

Marico's scrip was down Rs 204.45 on the Bombay Stock Exchange (BSE), down 4.37 per cent from its previous close.