Consumer goods major Marico on Friday reported a 4.2% year-on-year (y-o-y) increase in consolidated net profit to Rs 399 crore for the October-December quarter (Q3FY25), while revenue grew 15.4% y-o-y to Rs 2,794 crore, aligning with Street estimates.
Bloomberg consensus estimates had projected net profit at Rs 402 crore and revenue at Rs 2,744 crore for the quarter. The FMCG major benefitted from price hikes in its domestic business but faced margin pressures due to rising input costs.
The company expects demand to remain stable in the coming quarters, supported by rural recovery and government measures. However, rising input costs may continue to impact profitability, analysts stated.
“While the sharper-than-anticipated rise in input costs will have some transient impact on margins in the near term, we remain biased towards driving top-quartile volume growth and double-digit revenue growth in the near and medium term,” said Saugata Gupta, managing director and CEO of Marico.
Marico’s earnings before interest tax depreciation and amortisation (Ebitda) increased by 3.9% y-o-y to Rs 533 crore, in line with street estimates of Rs 539 crore for the quarter. Ebitda margin contracted by 210 basis points to 19.1%, compared to 21.1% last year, due to higher raw material costs, particularly copra and vegetable oils. Gross margin fell by around 180 basis points y-o-y.
The board declared an interim dividend of Rs 3.5 per share, with a record date of February 7. The dividend will be paid on or before March 2. Marico shares fell post Q3 results on Friday, giving up the day’s gains. The stock was trading down 0.07% to Rs 671.85 apiece on the BSE.
Marico’s domestic business, which contributes 75% to overall topline, saw revenue rise 17% to Rs 2,101 crore in Q3, supported by a 6% volume growth. This marked the highest volume and revenue growth in 13 quarters, aided by price hikes across key product categories. But gross margins were affected by cost inflation. The company’s general trade channel saw sluggish growth, while modern trade and e-commerce drove sales, the company said.
Parachute Rigids recorded 3% volume growth, despite rising copra (the dried flesh of a coconut) prices. Price hikes helped push revenue growth to 15%. The company implemented a 5% price hike at the end of the December quarter, citing continued cost pressure.
Other key segments saw mixed trends too. Hair oils declined in value terms but showed signs of sequential recovery, particularly in mid- and premium-priced products. The foods portfolio reported strong growth, nearing an annual run rate of Rs 1,000 crore, while the premium personal care segment, including digital-first brands, continued to expand. Edible oils saw stable volumes despite rising input costs, with revenue growth driven by price increases.
The company’s international business saw revenue grow 16% in constant currency terms, but performance varied across markets. Bangladesh reported a 20% growth on a weak base, while MENA posted a 35% increase in topline. South Africa registered a 17% rise, but South East Asia struggled due to weak demand and geopolitical issues in Myanmar. Currency depreciation in some markets impacted earnings, leading to an estimated 2% hit to consolidated Ebitda.