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Informist, Monday, Aug 5, 2024

 

--Marico Apr-Jun consol net profit 4.64 bln rupees vs 4.27 bln

--Analysts saw Marico Apr-Jun consol net profit 4.71 bln rupees

--Marico Apr-Jun consol revenue 26.43 bln rupees vs 24.77 bln

 

By Avishek Rakshit

 

KOLKATA – Backed by 4% growth in domestic sales volume and market share gains for some products, Marico Ltd posted an 8.7% year-on-year growth in consolidated net profit for the June quarter to 4.6 bln rupees. The consolidated revenue rose 6.7% year-on-year to 26.4 bln rupees. The company marginally missed the Street's projection of 4.7 bln rupees for net profit and 26.6 bln rupees for revenue.

 

Marico's earnings before interest, tax, depreciation, and amortisation rose 9.1% to 6.3 bln rupees and the EBITDA margin grew by 50 basis points to 23.7%. Gross margin expanded by 230 basis points.

 

The company's revenue from India, which accounts for 74% of the turnover, rose 7.4% to 19.6 bln rupees, and the revenue from its international business, which accounts for the rest 26% of the topline, grew by 4.8% to 6.8 bln rupees. However, the pre-tax profit from its Indian operations did not keep pace with the revenue growth and rose by 3.7%. On the other hand, the growth in profit from the global business exceeded that of global revenue, rising by 8.8%.

 

In an earnings presentation to investors filed with the bourses, the company said that coconut oil brand Parachute, which alone accounts for 34% of its domestic revenue, registered a 2% growth in sales volume and 6% growth in value. The edible oil brand Saffola, which contributes 16% towards Marico's domestic sales, had a mid-single digit volume growth and only 1% value growth. Other value added hair oils like Hair & Care, Nihar, which account for 22% of its domestic sales, registered a 5% value growth.

 

In the presentation, Marico said that business in the Apr-Jun quarter was robust for its foods division with an annualised run rate of 8 bln rupees, and the personal care division, comprising serums, male grooming, and skin care products registered an annualised run rate of 3 bln rupees.

 

In the case of international operations, the company registered a 10% constant currency growth in Bangladesh – the largest international market, and the constant currency growth of 28% in South Africa. In West Asia, revenue grew by 20% led by Egypt. In South Asia, the constant currency growth was flat. Overall, Marico's revenue in constant currency terms grew by 10%. However, the revenue contribution from Bangladesh towards its international business has been on a steady decline since 2021-22 (Apr-Mar) and fell to 44% from 51% three years ago. It is expected to fall further to 40% by April 2027.

 

In its business outlook, Marico said that it aims to double its foods portfolio by end of March 2027 from the current level, and the foods business is poised for over 20% revenue growth on a compounded annual growth rate after successful initiatives towards refinements in supply chain and other measures. The company is also aiming for double-digit EBITDA margin for its digital-first brands in 2026-27.

 

On the National Stock Exchange, shares of Marico closed 1.5% higher at 672.15 rupees.  End

 

Edited by Ashish Shirke

 

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