FMCG firm Marico Ltd on Saturday reported a 3.28 per cent increase in its consolidated net profit to Rs 377 crore for the first quarter ended June 30, 2022.
The company had posted a net profit of Rs 365 crore in the April-June period a year ago, Marico said in a BSE filing.
Its revenue from operations rose marginally by 1.3 per cent to Rs 2,558 crore, as against Rs 2,525 crore in the corresponding quarter of the previous year.
However, Marico’s revenue from the domestic market dropped 3.56 per cent to Rs 1,921 crore as against Rs 1,992 crore earlier.
“In India, the FMCG sector witnessed volume decline in Q1FY23 for the third quarter in a row and value growth continued to be price-led. Domestic volumes declined by 6 per cent YoY, dragged by a double-digit decline in Saffola Oils. Ex-Saffola Oils, domestic volume growth was 1 per cent,” Marico said in an earnings statement.
During the quarter, Marico’s Saffola franchise, comprising refined edible oils and foods, declined by 13 per cent in value terms, it added.
”Saffola Edible Oils declined sharply given high in-home consumption in the base, visible downgrading from super-premium to mass segments and a volume drop in the ROCP category (Refined Oil in Consumer Packs),” it said.
However, its revenue from international sales climbed 19.51 per cent to Rs 637 crore compared to Rs 533 crore in Q1 FY22.
“The International business sustained its strong momentum of predictable and profitable growth. The business delivered 18 per cent constant currency growth in the quarter with each market contributing handsomely,” it said.
Marico’s total expenses dipped to Rs 2,076 crore from Rs 2,085 crore in Q1 FY22.
Its profit after tax was “due to a higher effective tax rate (ETR) after the expiration of fiscal benefits in one of the manufacturing units.” Regarding its gross margins during the quarter, Marico said it “expanded 401 bps YoY, attributable mainly to benign copra prices and favourable mix impact.” The company’s MD and CEO Saugata Gupta said, “The year began on a mixed note with the domestic business contending with persistent inflation and resultant weak demand conditions, while the international businesses posted a robust all-round performance.” “We expect volume trends to improve once inflation pressures ease,” he added.
On the outlook, Marico said in the near term, it expects volume growth to be in the positive zone.
“We hope to accelerate volume growth to our medium-term target levels in H2, provided inflation cools off and eases pressure on demand,” it said.
“Taking into account the quarterly gyrations of all cost line items, we would aim to deliver 18-19 per cent EBITDA margin in FY23,” it added.