FMCG major and the maker of brands like Saffola and Parachute, Marico Ltd on Monday posted its fiscal first quarter profit at Rs 474 crore, up 8.7 per cent in comparison to Rs 436 crore during the corresponding quarter of previous fiscal year. It recorded revenue from operations at Rs 2643 crore, up 6.7 per cent as against Rs 2477 crore during the same period of FY24, with underlying volume growth of 4 per cent in the domestic business and constant currency growth of 10 per cent in the international business. The company EBITDA stood at Rs 626 crore, up 9.1 per cent on-year. Gross margin expanded by 230 bps YoY, owing to benign input costs and favorable portfolio mix.
A&P spends were up 13 per cent YoY, as the company sustained focus on strategic brand building of core and new businesses.
During the quarter, Marico said, overall FMCG volume trends in India continued to exhibit gradual improvement on a 2-year CAGR basis, with the trajectory in rural areas bearing more promise, while urban was stable. Pricing growth, it added, for the sector turned flattish on a YoY basis. Meanwhile, premium segments continued to outpace mass segments, while alternate channels gained salience vis-à-vis General Trade (GT).
Marico recorded domestic revenue at Rs 1,962 crore, up 7 per cent YoY, as volume growth was supplemented by price hikes in the Coconut Oil portfolio, which more than offset the residual base impact of pricing cuts in the Saffola Oils portfolio.
The International business, it said, sustained its double-digit constant currency growth momentum with each of the key markets delivering broad based growth. Within the International business, Bangladesh registered 10 per cent CCG (constant currency growth) as the business stayed resilient and sustained its momentum. South-East Asia was flat in CC terms, as the recovery in HPC demand in Vietnam was offset by a weak quarter in Myanmar. MENA delivered 20 per cent CCG with both the Gulf region and Egypt faring well. South Africa registered 28 per cent CCG driven by the ethnic hair care segment. NCD and Exports posted 14 per cent growth. “We will continue to invest aggressively towards diversifying the portfolio, expanding the total addressable market and driving market share gains in each of the markets. We aim to maintain the double-digit constant currency growth momentum over the medium term,” the company said in a regulatory filing.
Q1 highlights across product portfolio
During Q1, Parachute Rigids registered 2 per cent volume growth. The company said that the volume offtakes grew by 8 per cent during the quarter, which was reflective of the consistent market share and penetration gains witnessed by the brand.
Value-Added Hair Oils declined 5 per cent in value terms amidst persistent sluggishness and competitive headwinds in the bottom of the pyramid segment. Secondary sales and offtakes grew in low single digits during the quarter. Mid and premium segments of franchise continued to fare relatively better.
Saffola Edible Oils delivered mid-single digit volume growth as input and consumer pricing remained stable. Revenue declined marginally on a year-on-year basis, due to the last leg of pricing corrections not factoring in the base.
Foods posted 37 per cent value growth YoY. Saffola Oats delivered over 20 per cent growth, while the relatively newer franchises also scaled up on expected lines.
Premium Personal Care sustained its strong growth trajectory during the quarter, led by the Digital-first portfolio, Marico said. Beardo continued to scale well and is on course to deliver double-digit EBITDA margin this year. Just Herbs and the personal care portfolio of Plix continued to gain traction, it added.
“We expect consolidated revenue growth to trend upwards during the course of the year, on the back of an improving trajectory in domestic volume growth, a favorable pricing cycle in key domestic portfolios and healthy growth momentum in the international business. We will continue to drive steady progress towards our key strategic objectives in the domestic as well as the International businesses and aim to deliver revenue-led earnings growth in FY25,” Marico said in a statement.