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Informist, Friday, May 2, 2025

 

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--Marico Jan-Mar consol net profit INR 3.43 bln 
--Analysts saw Marico Jan-Mar consol net profit INR 3.38 bln 
--Marico Jan-Mar consol net profit INR 3.43 bln vs INR 3.18 bln year ago
--Marico FY25 consol revenue INR 108.31 bln vs INR 96.53 bln year ago 
--Marico Jan-Mar international revenue INR 6.62 bln vs INR 5.98 bln yr ago 
--Marico Jan-Mar India revenue INR 20.68 bln vs INR 16.80 bln year ago 
--Marico FY25 consol net profit INR 16.29 bln vs INR 14.81 bln year ago 
--Marico Jan-Mar consol revenue INR 27.30 bln vs INR 22.78 bln year ago 
--Marico to pay INR 7 per share final dividend 
--Marico: Saffola edible oil value grew 26% in Jan-Mar 
--Marico: Saffola edible oil saw marginal drop in volume growth in Jan-Mar 
--Marico: Parachute coconut oil value grew 22% in Jan-Mar 
--Marico: Parachute coconut oil volume fell 1% in Jan-Mar 
--Marico: Expect operating margin to inch up in medium term 
--Marico: Aim to keep double-digit growth in constant currency for intl ops 
--Marico:Intl sales from premium categories rose at CAGR of 24% in FY21-FY25 
--Marico: See intl sales from premium categories to rise 25?GR ahead 
--Marico board reappoints Saugata Gupta as MD, CEO for 2 yrs from Apr 1, 2026 
--Marico:Will strive to deliver double-digit operating profit growth in FY26 
--Marico: Expect to sustain double-digit revenue growth in FY26 
--Marico: Jan-Mar India sales up on prices hikes in core portfolio 
--Marico Jan-Mar consol EBITDA margin 16.8%, down 260 bps on year 
--Marico Jan-Mar consol EBITDA INR 4.58 bln, up 4% on year 
--Marico FY25 domestic volume grew 5% on year 
--Marico Jan-Mar international ops grew 11% in constant currency terms 
--Marico Jan-Mar domestic volume grew 7% on year 
--Marico Jan-Mar consol cost of materials INR 10.33 bln vs INR 9.38 bln 
--Marico Jan-Mar consol advt expense INR 3.05 bln vs INR 2.26 bln year ago
 

 

By Anand JC

 

NEW DELHI – Marico Ltd.'s March quarter consolidated top line trumped expectations as it registered the strongest year-on-year growth since the September quarter of 2020-21 (Apr-Mar), driven by price hikes. The company's India business registered a volume growth of 7% in the March quarter, the highest in 14 quarters.

 

Marico's consolidated net profit for the March quarter was INR 3.43 billion, up 8% on year, and just above the Street's expectation of 3.38 billion. The company reported a consolidated revenue from operations of INR 27.30 billion, up 20% on year, higher than the analysts' estimate of INR 26.30 billion. Its revenue from India business rose 23% on year to INR 20.68 billion, aided by price hikes in core portfolios in response to elevated input costs, the company said in a release. 

The company said consumer sentiment remained stable in the latest quarter, wherein demand improved in India's rural markets, but was mixed in the mass and premium urban segments. "We witnessed the transient impact of hyperinflation and resultant steep price increases in core portfolios, but maintained robust momentum in the new businesses," Marico said. Alternate channels like quick commerce and e-commerce continued to gain salience compared to the brick-and-mortar general trade during the quarter.
 

Marico's EBITDA for the March quarter was INR 4.6 billion, up 4% on year. Its EBITDA margin for the quarter was 16.8%, down 260 basis points. The fast-moving consumer goods company's EBITDA for FY25 was INR 21.4 billion, up 6% from a year ago, while its EBITDA margin fell 125 bps to 19.7%

Marico's gross margin fell 300 bps on-year in the March quarter due to an increase in copra and vegetable oil prices, which was partly offset by price hikes in key portfolios.

 

Portfolio Performance

Copra prices increased 48% on year in FY25, while rice bran oil prices rose 25%. Copra is a key ingredient for Marico's Parachute Coconut Oil, which contributes 33% to its India revenues. Marico used price hikes to pass on the input price pressures. "We continued to prioritise the expansion of our consumer franchises in the current environment, while judiciously leveraging the pricing power of these franchises in the near term," it said.

 

The company has a market share of 63% in the coconut oil franchise market. In the March quarter, Parachute coconut oil reported a volume decline of 4% while Saffola Edible Oil posted a marginal drop, the company said. The categories saw "transient sluggishness amidst inflation," Marico said. Around 95% of Marico's business gained or sustained market share in the March quarter. 

Value-added hair oils like Parachute Aloe Vera and Parachute Ayurvedic saw a market share gain of 120 bps on a moving annual total basis. This segment contributes 19% to Marico's India revenues and registered a value growth of 1% in the March quarter. Saffola Edible Oil, its vegetable oil offering, contributes 19% to the company's India revenues. The product grew 26% in volume terms in the March quarter. The brand recorded a low single-digit volume decline amidst elevated pricing in response to elevated vegetable price tables, Marico said. 

The foods segment of Marico, which includes products like Saffola Oats, recorded a value growth of 44% year-on-year in the March quarter. The segment's revenue crossed INR 9 billion in FY25. The composite revenue share of Marico's foods and premium personal care segments in its India business was around 22% in FY25.

 

International Business

The international business of Marico reported a volume growth of 16% in constant currency terms in the March quarter and 14% in FY25. The company is banking on the premiumisation strategy to drive its international business growth. Revenue share of premium categories in FY25 stood at 29%, up from 20% in FY21, registering a compound annual growth rate of 24%. Going ahead, Marico expects a CAGR of over 25%. 

 

Bangladesh posted a constant currency growth of 11% in a "challenging environment," Marico said. Vietnam was subdued amidst sluggishness in some key categories, but is expected to pick up gradually in the coming quarters.

 

West Asia and North Africa markets registered a growth of 47% in constant currency terms, while volume growth in South Africa was 13%. New country development business and exports grew 16% in the March quarter. The foreign exchange headwinds in Marico's key markets impacted its consolidated earnings before interest, taxes, depreciation, and amortisation by 2% in FY25, it said. 

 

Expenditure Profile

Marico's total expenses in the March quarter grew 23% on year to INR 23.36 billion, largely driven by input cost increases and an uptick in marketing spends. Cost of materials consumed increased 10% to INR 10.33 billion. On a consolidated basis, material cost forms 44% of Marico's total expenses while marketing spends form 13%.

 

Marico incurred INR 3 billion towards advertisement and sales promotion. This 35% year-on-year growth is in line with the company's strategic intent to continually strengthen its franchises and accelerate diversification, Marico said.  

 

Demand and Outlook

Demand in the rural market was driven by a healthy monsoon season, higher minimum support price for crops, and continued government spending in FY25. In the urban areas, healthy sentiment was seen in the upper-middle and affluent segments, while bouts of elevated retail and food inflation during the year weighed on mass urban consumption, Marico said. Newer channels of trade gained traction while general trade remained under pressure. 

 

Marico expects its core growth categories to gradually improve due to moderating retail and food inflation, a healthy monsoon season going ahead, and its initiatives to support select general trade channel partners. The company saw healthy off-take, penetration, and market share gains in its key portfolios. 

 

"We will continue our focus on driving differential growth in our urban-centric and premium portfolios through the organised retail and e-commerce channels. Therefore, we expect to deliver consistent and competitive growth in the medium term through a much sharper and targeted portfolio and SKU strategy in each channel," Marico said in a statement. 

Scaling up of foods and premium personal care portfolios has resulted in a visible shift in the revenue construct of its India business, which has enabled differential growth outcomes amidst relatively slower demand in mass consumption-led franchises over the past few quarters, Marico said. The company expects the gross and operating margins of its food portfolio to improve gradually over the medium term. 

 

The FMCG major expects to sustain double-digit revenue growth momentum and deliver a double-digit operating profit growth in FY26. "We also expect operating margin to inch up over the medium term with leverage benefits as well as premiumisation of the portfolios across both the India and International businesses," Marico said.

 

The company reported a consolidated net profit of INR 16.3 billion for FY25, up 10% on year, on revenues of INR 108.3 billion, up 12% on year. Marico's board approved a final dividend of INR 7.

 

The board also approved the re-appointment of Saugata Gupta as the company's managing director and chief executive officer for two years with effect from Apr. 1, 2026. Gupta, who joined the company in 2004, was elevated as the managing director in 2014.

 

Marico reported its earnings after the market hours. Friday, its shares closed 1.8% lower at INR 697.75 on the National Stock Exchange.  End

 

Edited by Saji George Titus

 

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