FMCG major Marico posted its fiscal fourth quarter net profit at Rs 305 crore, up 18.7 per cent on-year from Rs 257 crore in the same quarter last year, beating estimates. According to a CNBC TV18 poll, Marico was expected to post net profit at Rs 284 crore and revenue at Rs 2,275 crore. The FMCG firm recorded the quarter revenue from operations at Rs 2,240 crore, up 3.7 per cent from Rs 2,161 crore in the fourth quarter of FY22, with underlying volume growth of 5 per cent in the domestic business and constant currency growth of 16 per cent in the international business. EBITDA stood at Rs 393 crore.
The Board of Directors also approved the re-appointment of Saugata Gupta as the managing director & chief executive officer for a term of two years and appointment of Rajan Bharti Mittal as an additional director in the capacity of Independent Director for a term of five consecutive years.
“During the quarter, the prospects for a sustained recovery in consumption trends strengthened as the sector recorded low single digit volume growth in Q4 after five consecutive quarters of volume decline,” Marico said in the regulatory filing. It added that the moderation in input prices and retail inflation should aid the improving trend in the coming year. While the urban consumption, Marico maintained, has remained steady in the past few quarters, the rural sector has most likely bottomed-out as the declining trend reversed in this quarter.
Marico’s category wise performance
In terms of categories, Marico’s Parachute Rigids posted 9 per cent volume growth. Volume growth in Q4 was 6 per cent on a 4-year CAGR basis. “The brand will continue to focus on penetration gains through micro-marketing interventions in relevant markets,” Marico said. Value added hair oils posted a value growth of 13 per cent in Q4. “With rural and mass personal care categories likely to turn the corner, we expect more cheer for the franchise in the coming year,” the consumer goods company said. Saffola edible oils witnessed a mid-single digit volume decline on a high volume base sustained during the outbreak of the Omicron variant of COVID-19 last year. Meanwhile, foods grew 18 per cent in Q4 to close near the Rs 600 crore revenue mark in FY23. “Saffola Oats continued to anchor the growth as it maintained its leadership position in the oats category. Newer offerings such as honey, soya chunks, peanut butter, munchiez and mayonnaise witnessed healthy traction. We expect the franchise to close above the Rs 850 crore revenue mark in FY24 as we expect an acceleration in urban consumption,” Marico said.
Premium Personal Care had another reassuring quarter with +20 per cent growth and closed just shy of Rs 350 crore in revenues in FY23. The Digital-first portfolio also scaled up well in line with expectations. Copra declined by 7 per cent on-year and was up 2 per cent sequentially. Rice Bran oil was down 16 per cent sequentially and 22 per cent YoY. Crude derivatives such as Liquid Paraffin (LLP) was up 21 per cent YoY while HDPE was down at 2 per cent YoY.
In terms of domestic and international business, Marico said that the India business continued to better the performance of the preceding quarter with an underlying volume growth of 5 per cent. Domestic revenue stood at Rs 1683 crore, up 2 per cent on-year. International business recorded revenue of Rs 557 crore in the quarter. Among the sales channels, general trade declined in low single-digits, while modern trade and e-commerce grew in double digits.
Outlook for FY24
“In the domestic business, we will drive volume led growth and market share gains across our portfolios, aided by distribution expansion, aggressive cost controls and adequate investment in market development and brand building. We expect a gradual uptick in revenue growth as pricing interventions come into the base in the first half of FY24,” Marico said in the regulatory filing. For international business as well, Marico remained confident of maintaining the double-digit growth momentum in FY24.