Home-grown FMCG firm Marico is expecting a volume growth of 8 to 10 per cent and double-digit constant currency growth in international business over the next 3 to 5 years on account of strategic investments, a top company official has said.
Home-grown FMCG firm Marico is expecting a volume growth of 8 to 10 per cent and double-digit constant currency growth in international business over the next 3 to 5 years on account of strategic investments, a top company official has said. The company is also looking at achieving a healthy market share gains as it plans to focus on strengthening its core portfolio, driving premiumisation in value added hair oils and expanding portfolio in the existing and new markets.
In addition to that, Marico has also plans for strategic investments in its core foreign markets such as — Bangladesh, Vietnam, Middle East and North Africa and South Africa, coupled with expansion in adjacent markets. “The company is aiming for 8-10 per cent volume growth over the medium term (3 to 5 years), coupled with healthy market share gains,” Marico CFO Vivek Karve told PTI. He further said that Marico “will focus on strengthening the core portfolio… creating new engines of growth with portfolio expansion in existing and new markets”. The Mumbai-based company now aspires to deliver a top-line growth of 13-15 per cent in the medium term (3 to 5 years) and cross revenue of Rs 10,000 crore by FY 2021-22.
Marico has identified premium leave-in hair nourishment, healthy foods and male grooming as new vectors of growth. “The company will invest in existing and new brands. In the healthy foods franchise, the company will innovate aggressively to cater to the consumer need of tasty and healthy options. In the categories of leave-in serums and male grooming, the company will innovate with new product and packaging offerings to build them into growth engines for the future,” said Karve adding that Marico “aims to deliver growth at 15 per cent plus CAGR in each of these portfolios in the medium term”. Besides, Marico would also continue to expand its reach by “tapping into the bottom of the pyramid, aggressive growth in modern trade and e-commerce channels and embracing digital”.
For FY 2017-18, Marico had a revenue of Rs 5,181.32 crore. Marico expects that a good monsoon and government’s efforts to increase farmers’ income would increase demands from the rural markets, which contributes around one third of its domestic revenue. “The company expects to take this up by at least 3-4 percentage points in the next 3-5 years by driving penetration through price point packs and focused GTM (go-to-market) initiatives,” he added.
According to him, the “transitory headwinds” in the domestic market which had brought structural reforms in FY17 and FY18 are now appearing to have “largely receded”. Marico, which had got 22 per cent of its revenue in FY18, would expand its footprint in the overseas markets and be a leading company in “nourishment and male grooming” in the Asian and African markets, in which it operates.
“We aim to deliver double-digit constant currency growth in FY19 and the medium term, on the back of strategic investments planned in core markets of Bangladesh, Vietnam, Middle East & North Africa and South Africa, coupled with expansion in adjacent markets of South Asia, Indo China region and new export markets,” said Karve. According to him: “Overall, the Company expects to deliver a top line growth of 13-15 per cent (depending on inflation) in the medium term and cross the milestone of Rs 10,000 crore by FY22.”