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Marico gains after Q4 business update

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Marico rose 1.06% to Rs 411.50 after the FMCG company announced that the India business delivered a very strong double-digit volume growth in Q4 March 2021.

Marico said it witnessed healthy momentum building across its key portfolios. General trade put up a strong show led by rural growth. E-commerce continued to gain salience. Modern trade was affected by the high base on account of the pre-lockdown pantry loading in March last year, but has been in recovery mode. Canteen Stores Department (CSD) rebounded to post healthy growth.

Marico's India business delivered a very strong double-digit volume growth, albeit on a low but relatively stronger base when compared to key peers in the sector. The FMCG company further said that marginal correction of the historical revenue skew in Q4 and Q1 also played a part in the optical growth.

Revenue growth in Q4 was even higher than volume growth due to pricing interventions in key portfolios to partially alleviate the significant input cost push during the period.

Parachute Coconut Oil led from the front, posting stellar volume growth. Saffola Edible Oils grew in double digits for the sixth quarter in a row, despite a very high base. Value Added Hair Oils firmly moved along a sustainably recovering trajectory with high double-digit volume growth in the quarter.

The Foods portfolio more than doubled in size with a strong performance in the Oats franchise and aggressive innovations through this year. While select franchises of Premium Personal Care continued to trend positively, the overall portfolio was still muted.

The FMCG company's International business, too, posted strong double-digit constant currency growth on the back of recovery across markets.

As operating margin is likely to dip significantly owing to the severe input cost pressure, Marico expects to deliver low double-digit bottom line growth in the quarter.

While the input cost environment has turned challenging in the short term, the FMCG company expects these trends to be transient and correct from Q2 next year. Notwithstanding the quarterly variations in volume growth/margins over the last 15 months, the company maintains its aspiration of delivering sustainable and profitable volume-led growth over the medium term, on the back of the strengthening brand equity of its core franchises and progressively driving and scaling up new engines of growth.

Marico is a leading Indian group in consumer products in the global beauty and wellness space. The company's consolidated net profit rose 13% to Rs 312 crore on 16.34% increase in net sales to Rs 2,122 crore in Q3 FY21 over Q3 FY20.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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First Published: Mon, April 05 2021. 14:55 IST
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