Consumer goods major Marico posted a 3% year-on-year (y-o-y) decline in net profit to Rs 204 crore for the quarter ended March 31, while the revenue from operations, at Rs 1,496 crore, declined 7% y-o-y. The company’s India business recorded a volume decline of 3%, vastly affected by disruptions in the last fortnight of March due to lockdowns, initially enforced in some states and eventually all over the country, to contain the pandemic outbreak in India, the company said in a statement.
In the last week of March, the company was able to record sales largely in the Saffola Oils and Foods portfolio. The company managed to post low single-digit volume growth in secondary sales during the quarter.
Marico said it witnessed some encouraging signs in demand in its core portfolios until early March, which sharply diminished as economic activities progressively slowed and adherence to social distancing norms became imperative.
Stress in personal care categories heightened during the period. In contrast, food and allied categories, which were growing healthily earlier as well, gained disproportionately with households stocking up these items in the days leading to the lockdown.
“While overall category growth rates stayed muted, Marico’s core brands continued to gain market shares on a MAT basis. Challenges for the traditional channel in rural and urban mounted during the quarter, while Modern Trade and E-Commerce grew healthily and gained higher salience in the India business,” it said.
With Covid-19 turning into a pandemic, the overseas geographies were also impacted in varying degrees. The international business declined by 6% in constant currency terms with Middle East and North Africa (MENA) and South Africa businesses posting sharp drops, while Bangladesh and Vietnam still ended in the green, given relatively limited restrictions imposed in these regions in March.
Meanwhile, ebitda was down 4% y-o-y to Rs 282 crore, gross margins improved marginally by 22 basis points due to the unfavourable portfolio mix in the India business.