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FMCG major Marico Ltd on Friday posted a 16.7 per cent increase in its consolidated net profit for the quarter ended December. The company clocked ₹383 crore profit during the quarter against ₹328 crore during the same quarter last year. On a sequential basis, Marico reported an 8.49 per cent increase in net profit at ₹353 crore.
Revenue from operations fell 2 per cent to ₹2,422 crore (₹2,470 crore). Revenue from operations dropped 2.1 per cent from ₹2,476 crore in the September quarter.
Rural demand soft
The Mumbai-headquartered FMCG major said that the rural demand remained soft, while urban demand saw moderate growth during the quarter. The rural demand was witnessed in mass, home and personal care categories, while packaged foods led to the demand growth in urban areas.
The India business delivered a turnover of ₹793 crore, down 3 per cent on a year-on-year basis. The India business for the company posted a 2 per cent volume growth that saw a dip due to stock reduction undertaken across key portfolios.
Parachute Rigids reported a 3 per cent growth in volume, while Saffola Oils posted a mid-single-digit volume decline due to sluggish trade sentiment resulting in lower inventory levels. Further, the revenue declined in the mid-20s for Saffola Oils due to pricing corrections over the last 12 months. Value-added hair oil grew 3 per cent in volume terms.
The premium personal care witnessed a double-digit growth and the digital-first portfolio clocked an exit ARR of above ₹400 crore in Q3. The share of foods and premium personal care was 20 per cent of domestic revenues in the quarter.
The international business delivered a mid-single-digit constant currency growth (CCG).
“We have delivered a competitive performance in a volatile operating environment. In the domestic business, we witnessed signs of improvement in the core portfolios and expect the steps we have initiated to fundamentally improve the business prospects of the GT channel to aid the same. The portfolio diversification through Foods and Premium Personal Care continues to progress well. The international business has been resilient amid transient headwinds and we anticipate a healthy growth momentum ahead. We are on course to deliver our highest-ever operating margin this year and expect to maintain a resilient margin profile in the quarters ahead,” said Saugata Gupta, MD & CEO, Marico Ltd.
Analyst view
“Marico witnessed a revenue de-growth on account of subdued volumes (2 per cent in domestic business, 6 per cent CCG in IBD) and a decline in realisation due to price cuts. However, margins expanded due to lower input cost prices and part of the gains were used to ramp up A&P spending by 125 bps. Marico expects positive revenue growth in Q4 along with GM expansion about 450-500 bps YoY and the highest-ever operating margin expansion of about 250 bps in FY24. We expect a gradual uptick in consumption trends led by improving macro-economic indicators, continued government spending and conducive consumer pricing across categories due to low input costs,” said Amnish Aggarwal – Head of Research - Prabhudas Lilladher Pvt Ltd.
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