New Delhi: Homegrown FMCG major Marico Ltd Monday reported a 15.9 per cent increase in its consolidated net profit to Rs386 crore for the third quarter ended December 2023, helped by softer input costs and a favourable portfolio mix.
It had posted a net profit of Rs333 crore in the October-December quarter a year ago, according to a regulatory filing by Marico, which owns popular brands like Saffola, Parachute, Livon etc.
However, its consolidated revenue from operations fell 1.94 per cent to Rs2,422 crore during the quarter under review from Rs2,470 crore a year ago.
“The India business posted volume growth of 2 per cent, which dipped sequentially primarily due to a stock reduction undertaken across key portfolios as a part of the aforesaid initiatives to support our GT channel partners,” said an earning statement from Marico.
In the December quarter, offtakes remained healthy across its key portfolios, with over 75 per cent of the business either gaining or sustaining market share and penetration levels.
“Gross margin expanded by 634 bps year-on-year, ahead of expectations, owing to softer input costs and favourable portfolio mix,” Marico said, adding its “EBITDA margin stood at 21.2 per cent, up 272 bps year-on-year. EBITDA grew by 13 per cent”.
Its advertising and promotion spending was up 12 per cent year-on-year in the December quarter.
The total expenses of Marico in the December quarter stood at Rs 1,970 crore, down 4.7 per cent.
Harsh Mariwala-led company’s total income slipped 1.79 per cent to Rs 2,465 crore.
Marico’s revenue from its domestic business fell 3.13 per cent to Rs 1,793 crore in the December quarter despite volume growth. This was Rs 1,851 crore in the year-ago period.
Marico’s food business continued its upward trajectory, reporting 18 per cent value growth year-on-year.
“The composite share of Foods and Premium Personal Care was 20 per cent of domestic revenues in Q3,” it said.
Its international business inched up 1.61 per cent to Rs 629 crore in the Q3 FY24. It was Rs 619 crore a year ago.
“The International business delivered mid-single digit constant currency growth dragged by transient macroeconomic headwinds in Bangladesh, while other regions delivered a resilient performance,” it said.
On the demand trend during the quarter, Marico said it “was stable with no visible improvement” from the preceding quarter.
“Rural demand remained soft, while urban demand steadied its moderate growth trajectory,” it added.
Within the sector, mass home and personal care categories aligned closely with the rural demand trajectory, while packaged foods led the sector, owing to higher urban salience and penetration-led growth.
“Among channels, General Trade continued to drag as it grappled with liquidity and profitability constraints, while alternate channels grew healthily,” it said.
Over the outlook, Marico said that with macro indicators signalling positivity, continued government spending and more favourable consumer pricing across FMCG categories, it remains “optimistic of a gradual uptick” in consumption trends over the course of the next 4-5 quarters.
“Our consolidated revenue growth is expected to move into the positive territory in the last quarter of the year as the base catches up. Gross margin is expected to expand by 450-500 bps on a full-year basis, higher than earlier envisaged, owing to sustained input cost tailwinds and favourable portfolio mix,” said Marico.
It expects its operating margin to expand by 250 bps in FY24.
Shares of Marico Ltd Monday at Rs 516.55 apiece on BSE, down 1.64 per cent from the previous close.
PTI
