Marico has posted a 6% year-on-year increase in consolidated net profit to Rs 328 crore for the third quarter ended December 31, 2022 because of higher effective tax rate, while recording underlying volume growth of 4% in the domestic business.
On a three-year CAGR basis, quarterly domestic volume growth stood at 6%.
Revenue from operations increased by 3% year-on-year to Rs 2,470 crore, led by constant currency growth of 8% in the international business.
India business delivered a turnover of Rs 1,851 crore, up 2% on a year-on-year basis. Parachute rigids was up 2% in volume terms after a tepid last few quarters, as the loose to branded conversions in the coconut oil picked up with copra prices firming up favourably in the off- season.
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During the quarter, the FMCG sector in India showed some signs of a gradual improvement in overall demand trends, in addition to the festive spirit and winter season providing some fillip to specific categories, company said in a statement.
The firm said it expects to clock volume growth in line with its medium-term aspiration going ahead as structural drivers of growth have come back in play.
“The quarter was characterised by improving trends in top-line and earnings growth as the domestic business witnessed emerging signs of a gradual demand revival, while the international business stood its ground amidst macro headwinds in some markets,” said Saugata Gupta, managing director and CEO, Marico Ltd.
The Ebitda (earning before interest, tax, depreciation and amortisation) increased 6% y-o-y to Rs 456 crore during the quarter ended December 2022, while the Ebitda margins improved by 55 basis points y-o-y to 18.5%. “Taking into account the quarterly gyrations of all cost line items, Ebitda margin will be in the 18-19% band in FY23,” the statement said.
Gross margins expanded 123 basis points y-o-y and 131 basis points sequentially, with continued benign prices of copra, vegetable oil and decline in crude based packaging cost during the quarter. “The gross margin should remain steady with an upward bias going ahead unless sharp volatility in key input costs resumes,” it said.
The impact of pack size reductions in the VAHO (value added hair oil) franchise on domestic volume growth was about 100 basis points.
VAHO posted value decline of 3% given the muted consumption sentiment in rural and sluggishness in mass personal care categories. Within the category, mid and premium segments continued to fare better than the bottom of the pyramid segment. The company said that in the near term, prominent green shoots in rural are eagerly awaited.
The Saffola franchise, comprising refined edible oils and foods, grew by 10% in value terms. Saffola oils stepped up growth from the last quarter to post low teen volume growth as stability in trade inventory and consumer pricing prevailed. Revenue growth, however, was lower owing to pricing corrections.
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Foods grew 31% in value terms with 20% growth in the oats franchise and newer offerings scaling up. Premium personal care continued to clock double-digit growth. Digital-first portfolios are scaling up in line with expectations.
The company said its sustained focus on execution and brand building investments translated into key franchises consolidating market shares during the quarter. Among the sales channels, general trade declined in mid-single digits, with rural still behind urban. Modern trade and e-commerce grew in high double digits.