The Hindu Business Line : Marico net up 24 pc in 2005-06

Marico Ltd reported a 23.85 per cent rise in profit after tax for 2005-06 to Rs 86.88 crore from the previous corresponding Rs 70.15 crore in its consolidated operations. Total revenue gained 13.76 per cent to Rs 1,147.48 crore (Rs 1,008.65 crore).

Interim dividend

The board has approved a fourth interim dividend for 2005-06 at the rate of Rs 2 per equity share of Rs 10. This takes the total dividend for FY06 to Rs 6.20 per share, the interim dividends having arrived in instalments of 12, 14, 16 and 20 per cent.

For the final quarter of FY06, the company notched a 24.52 per cent increase in profit after tax to Rs 23.97 crore (Rs 19.25 crore) on a 19.03 per cent growth in total revenue to Rs 297.87 crore (Rs 250.25 crore).

"It has been yet another robust result from the company. We have grown in every area," Mr Milind Sarwate, Chief Financial Officer, Marico, said. While FY06 advertisement and sales promotion spend touched Rs 138.78 crore (Rs 96.83 crore), the company benefited from lower raw material expense at Rs 483.25 crore (Rs 525.52 crore).

Raw material prices had been benign, but more important, Mr Sarwate said, was the company keeping its retail price unchanged for the last 15-odd months.

Future growth plans

Marico proposes to raise funds and hike authorised share capital. The funds — to refinance recent acquisitions and finance future growth plans — could be up to Rs 500 crore. A committee would decide on the various routes, including equity issue and preference shares on rights or private placement basis. During the last year, the company had made four acquisitions here and overseas (Camelia, Aromatic, Manjal and Nihar).

"We now want to have a proper financing mix, so part of the funds would be used for that. We also want money to tap at short notice, should similar opportunities arise in the future," Mr Sarwate said. Marico, with a total debt of around Rs 170 crore, will look at borrowings also as part of the funding mix.

The company's authorised share capital would be raised from Rs 60 crore to Rs 215 crore.

This is required by way of headroom, should the proposed fund raising involve preference shares.

Shares of Marico moved up by Rs 5.60 to Rs 544.35 in Thursday's trade on the Bombay Stock Exchange.