Marico posts profit of ₹273 crore in Q2

FMCG giant Marico on Wednesday posted a consolidated net profit of ₹273 crore in the second quarter of FY21, a 29.63 per cent dip compared to the consolidated net profit of ₹388 crore it had posted in the first quarter.

The company’s revenue from operations during the September quarter stood at ₹1,989 crore, a 3.32 per cent increase compared to the previous quarter. It had posted a revenue from operations of ₹1,925 crore in the June quarter of this year.

On a year-on-year basis, the consolidated net profit during the September quarter increased by 7.9 per cent from the consolidated net profit of ₹253 crore. PAT grew on a like-to-like basis at 15 per cent, the company said. The reported PAT was up 7 per cent after accounting for a one-time exceptional item (post tax impact of ₹21 crore), it said. The company partially rationalised capacities in one of the units by moving manufacturing closer to the demand centres, thus leading to impairment of fixed assets and inventories, said Marico. The revenue from operations in Q2 FY20 was ₹1,829 crore, marking an 8.74 per cent y-o-y increase in the September 2020 quarter.

Marico posted an underlying domestic volume growth of 11 per cent during the quarter. “With improving consumer sentiment and supply chain operations at near pre-Covid levels, a majority of the company’s portfolio came back to healthy growth on a year-on-year basis,” it said.

“The sector has witnessed some green shoots of revival in consumer sentiment with the gradual easing of lockdown restrictions imposed to curb the ongoing Covid-19 pandemic. Moreover, the inherent strength of our trusted franchises and deep distribution network have allowed the company to deliver a strong Q2 with broad-based double-digit volume growth in the domestic business and a stable performance overseas,” said Saugata Gupta, MD & CEO, Marico Limited.

Post-Covid business

The pandemic has led to some perceivably lasting changes in consumer behaviour, opening up exciting opportunities especially in the healthy foods and immunity-boosting categories, Gupta noted. “While staying on course in our core portfolios, we have been aggressively strengthening our play in fulfilling these evolving needs of our consumers through a bouquet of launches in these newer segments. The company will continue to rely on executional excellence and agility to grow its existing portfolios as well as scale up new bets in order to deliver steady and profitable volume-driven growth over the medium term,” he added.

Traditional channels continued to outperform with rural growing ahead of urban, while in the new-age channels, strong acceleration continued in e-commerce. Modern trade remained subdued and CSD continued to witness a steep decline, said Marico. International business grew by 7 per cent during the quarter in constant currency terms.

“With lockdown restrictions having significantly eased across the country, the company will strive to sustain the momentum and aim to deliver an 8-10 per cent volume growth in the balance part of the year. The company expects operating margins to be 20 per cent plus for FY21. Over the medium term, the company shall endeavour to deliver an 8-10 per cent growth, growing the core franchises and scaling up the foods business. With focus on gaining and defending market share, we expect to maintain a threshold operating margin of 19 per cent over the medium term,” said Marico.

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