On the back of strong sales, FMCG company Marico posted a 11.6 per cent rise in net profit at Rs 47.13 crore for the second quarter ended September 30 as against Rs 42.24 crore in the corresponding quarter last year. Its net income rose 30 per cent to Rs 603.49 crore in the quarter under review as against Rs 463.78 crore in the same quarter last financial year.
While its international business grew by 59 per cent during the quarter under review largely on account of the acquisition of South African business made during Q3FY08, it incurred a foreign exchange mark-to-market loss of Rs 7 crore due to rupee depreciation during the quarter.
In spite of inflationary pressures, consumption was not adversely impacted during the period. However, the maker of Parachute and Saffola brands faced volatility in the environment including input costs, foreign exchange rates and increased interest rates.Of the 30 per cent revenue growth, organic volume growth accounted for 11 per cent and acquisition-led growth contributed 3 per cent, while price hikes accounted for 16 per cent.
Marico's flagship brand Parachute recorded a 12 per cent volume growth during the quarter over a year ago and the hair oil has witnessed a price increase of 13 percent since July 2007 even as the price of copra rose by 30 per cent. “We are likely to face growth pressures in the short run. We will stay focused on strengthening equity in our established products and launching new ones in existing and contiguous categories,” Saugata Gupta, CEO- Domestic Consumer Products Business said.
Further, the company slashed sunflower oil prices, which did not see any price relief in the second quarter unlike other edible oils.The company's material costs as a percentage of revenue was 54.3, while personnel costs accounted for 6.4 percent. While the company expects a drop in the rate of growth in the immediate future it however will focus on long term sustainable growth.