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Informist, Friday, Jan. 31, 2025

By Steffy Maria Paul and Narayana Krishna

MUMBAI – Demand in urban regions softened sequentially during the December quarter, but improved in the rural areas, Marico Ltd.'s management said in a post-earnings analyst concall Friday. In the urban areas, demand was stable in the upper and upper-middle class segments, but subdued in the middle and bottom of the pyramid segments. 

While the share of alternate channels has been on the rise in tier 1 markets, the company expects general trade to continue to be a relevant and dominant channel, especially in tier 2 markets and beyond. The international business continued its growth momentum despite the impact of currency headwinds in key markets. Currency headwinds had a 2% impact on consolidated earnings before interest, tax, depreciation, and amortisation this quarter. Marico is on track to achieve a double-digit consolidated revenue growth for the full year, the management said. 

Marico reported a consolidated net profit of INR 3.99 billion for the latest quarter, up 4% from INR 3.83 billion a year ago. It reported a consolidated revenue of INR 27.94 billion for the quarter, up 15% from INR 24.22 billion a year ago. Marico's revenue from its domestic operations for the December quarter was INR 21.01 billion, up 17% on year. Its domestic volumes rose 6% on year. Its revenue from international operations for the latest quarter was INR 6.93 billion, up 10% on year and grew 16% in constant currency terms.  

The company did not fully pass on the inflation in copra prices to its customers during the quarter to protect its market share. The prices of copra are nearing the end of the inflationary cycle, Marico said, adding that it expects prices to cool down from the early June quarter. However, Marico will only reap the benefit of this with a lag due to the existing inventory.

The company's operations in Bangladesh delivered a strong growth even amid the challenging macro environment, Marico said. The company's operations in Bangladesh grew 20% in constant currency terms during the quarter and expects its operations in the region to maintain its double-digit momentum. Overall, the international business has maintained its double-digit constant currency growth momentum.

The company said it will continue to invest in the middle and premium sub-segment of its value-added hair oil category. However, it is facing unreasonable competition in the segment, it said.

Among channels, modern trade and e-commerce, including quick commerce, continued to lead with high double-digit volume growth, while general trade was flattish, the company said. While the share of alternate channels has been on the rise in tier 1 markets, the company expects general trade to continue to be a relevant and dominant channel, especially in tier 2 markets and beyond. Marico expects the upcoming Union Budget, which will be tabled on Saturday, to stimulate consumption and government schemes, rise in minimum support prices, and a good harvest to aid the ongoing recovery in rural demand.

On Friday, shares of the company closed at INR 670.65 on the National Stock Exchange, down 0.2%.  End

Edited by Akul Nishant Akhoury

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