In the April-June quarter, Marico Industries registered 13.4% growth in its revenues; volumes rose 16%. The company hopes to maintain the growth pace. However, as the prices of key inputs like copra have surged, the company has indicated a price hike within two-three weeks. Marico chief executive officer (consumer products) Saugata Gupta tells FE?s Shubham Batra that a price rise, in the large-pack segment across some brands, is on the cards. Excerpts:

Despite an increase in revenues, Ebitda margins declined. What would you attribute this to?

Last year, we had an Rs 4.8-crore excise provision, which was made from June onwards. This year it is Rs 8.8 crore for the quarter, an extra provisioning of Rs 4 crore. If you take this out of the operating profits, the numbers look constant at 14.5%. Additionally, there will be a marginal inflationary pressure. Lower ad and staff costs contributed 32 basis points (bps) and 16 bps, respectively. These savings were offset by higher cost of goods sold and other expenditure, which jumped by 79 bps and 19 bps, respectively, during the quarter. So all this gets mixed up.

Is the company?s good volume growth sustainable?

Growth in volumes looks sustainable at 14-15%. There could be inflationary pressure but if the monsoon is good, prices may cool down. Last year, when the input costs were low, we passed some of it to the consumers in value terms. Here, we have maintained the consumer franchise. Our business in the rural area grew 15%, which is faster than the returns from the urban belt.

Prices of raw materials like copra are rising. Do we see an uptick in prices?

Copra amounts to 40% of our input costs, which rose about 4% last quarter. Currently, there is some inflationary pressure and we are going to take marginal price increases selectively in some of the larger packs in next two-three weeks. But we are clear with our strategy in the ‘rural and recruiter packs’. Hence, there will be no price changes.

What were the new launches during the June quarter?

We launched Saffola Arise and Saffola Oats. In rice products, we are participating in a niche category, super-premium packaged rice. So are looking at Rs 25 crore from rice-based products by year end. We just prototyped oats in a modern trade format. The market for this is about Rs 120 crore, growing at 30-40%. We believe that exit annualised with these two we should be hitting an annualised number of Rs 30-35crore, which is another 1.5% to the top line. Product development participation is expected to increase. We are going to roll out cooling hair oil soon.