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FMCG major Marico said on Monday that it expects to deliver low double-digit bottomline growth in the last quarter of FY21, and that it maintains its aspiration of delivering sustainable and profitable volume-led growth over the medium term.
“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 said in its update on the operating performance and demand trends witnessed during the quarter ended March 31.
In the last quarter of the fiscal year, the FMCG sector continued to exhibit improving demand trends as quarterly economic growth has moved into positive territory and the Covid-19 vaccination rollout has gathered pace, the company said.
Rural growth
In Q4, general trade put up a strong show led by rural growth, while e-commerce continued to gain salience, said Marico. “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. CSD rebounded to post healthy growth.”
“The 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 company said.
A marginal correction of the historical revenue skew in Q4 and Q1 also played a part in the optical growth, the company said. 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, it added.
The international business, too, posted strong double-digit constant currency growth on the back of recovery across markets, said Marico.
While the input cost environment has turned challenging in the short term, the company expects these trends to be transient and correct from Q2 next year, it said.
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