Inflationary pressure weighs on Marico; sales up by 21%, net profit by 10%

Pain at the core-gross level also percolated to the earnings before interest, taxes, depreciation and amortisation (Ebitda)

Marico’s June quarter (Q1) numbers, announced on Thursday, were in line with analysts’ expectation. Sales and net profit grew 20.5 per cent over a year to Rs 20.3 billion and 10.3 per cent to Rs 2.6 billion, respectively.

However, operating profit was a disappointment, amid high inflationary pressure. As a result, the share price fell about five per cent to Rs 350.9.

With a 44 per cent year-on-year rise in the price of copra, a key input and 25-30 per cent of its raw material expense, plus a rise in other input and packaging prices, the gross profit margin contracted