Consumer goods major Marico net profit remained flat at ₹310 crore during the third quarter ended December 31, 2021 compared to ₹307 crore profit in the corresponding period last year. The company reported a revenue of ₹2,407 crore, thus seeing a 13.4 per cent year-on-year surge from ₹2,122 crore revenue during the period.

Moderation in growth

The company reported moderation in market growth, especially in rural areas. “In India, unabated inflation across the consumer basket led to moderation in consumption patterns and the share of wallet of staples, while discretionary and out-of-home categories fared better owing to some degree of pent-up demand. As a result, overall FMCG market volumes witnessed a drop in Q3, with rural visibly lagging urban,” Marico said.

The company, however, stated that their domestic business still showed resilience, with 94 per cent of their product portfolio showing market share gains. Marico also added that their “Volume growth on a 2-year compound annual growth rate basis was 7.3 per cent, much ahead of low single digit growth for the FMCG market.”

Outlook

Regarding the third Omicron wave, the company noted that the impact of the pandemic should remain constrained given the vaccine coverage. Marico also expects enhanced stimulus in the upcoming Union Budget and is optimistic of improvement in rural consumption sentiment. 

For Marico’s flagship product, Parachute hair oil, the company saw 1 per cent volume growth and 8 per cent value growth in the product. The company has also undertaken proactive pricing measures. However, copra prices also reduced in December 2021, therefore the company expects a soft outlook for the fourth quarter.

Saugata Gupta, MD & CEO commented, “The domestic business has delivered a resilient performance in the face of significant deceleration in the overall market growth in staples. Despite ongoing input cost pressures, we consciously stepped up investments to protect the long-term health of our brands, thereby leading to robust market share and penetration gains across our portfolio. The international business had another stellar quarter with all markets playing their part. With commodity prices cooling off, we expect profitability to pick up in the forthcoming quarters. We will continue to drive consistent and profitable growth over the medium term through premiumisation in core categories, scaling up of new growth engines, sharper go-to-market, aggressive cost management and optimal brand building investments.”

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