Companies

Acquired brands bat well for Marico

M. Ramesh Chennai | Updated on August 06, 2012 Published on August 06, 2012

Growth came mainly from hair oils. The Parachute brand coconut oil grew 18 per cent year-on-year, to gain 3 per cent market share, and value-added hair oils grew 25 per cent, with a market share gain of 2.7 per cent.

The brands that Marico Ltd acquired from Reckitt Benckiser recently have performed well.

In the one month of their coming into Marico’s fold, the three products Set Wet, Zatak and Livon, clocked Rs 10 crore.

Marico expects these brands to grow at 25-30 per cent in 2012-13. The three brands had clocked revenues of Rs 150 crore in the year 2011-12.

The purchase of the brands was announced in February, but was completed only during the first quarter of the current year.

Marico did not disclose the consideration for the acquisition, but a report of VCCircle, a portal that tracks M&A deals, had then estimated that Marico would have paid around Rs 400 crore.

It was then said that the acquisition was Marico’s 10th since 2006 and the largest.

“We believe Marico’s existing presence in male grooming categories in overseas markets will help drive synergy benefits with this new portfolio and cross pollination of brands may be a key future growth driver,” commented a report of Edelweiss issued on Friday.

Marico produces a range of FMCG products and among its better known brands are Parachute coconut oil and Saffola refined edible oil. In the recent years, the company has been on an acquisition spree increasing the range of its products.

For instance, it has acquired two hair care brands in Egypt, Fiancee and Haircode, which gave it control of 50 per cent of the hair care market in the country. Further, it acquired three soap brands in Bangladesh and skin care brand Derma Rx in Singapore to expand its presence there.

In 2011-12, Marico achieved a turnover of Rs 4,008 crore and made a net profit of Rs 319 crore. Each share earned Rs 5.2. In the first quarter of the current year, Marico’s turnover rose 22 per cent year-on-year to Rs 1,270 crore. Net profit grew 46 per cent, reflecting 6.6 per cent increase in gross margins.

Growth came mainly from hair oils. The Parachute brand coconut oil grew 18 per cent year-on-year, to gain 3 per cent market share, and value-added hair oils grew 25 per cent, with a market share gain of 2.7 per cent. These two products accounted approximately for 24 per cent and 14 per cent of the turnover for 2011-12. A fall in copra prices also helped Marico boost margins.

On the BSE on Monday, the Marico share, of face value of Re 1, was trading up at Rs 189.30 against the previous close of Rs 188.70.

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Published on August 06, 2012
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