FMCG firm Marico today reported 11.78 per cent increase in its consolidated net profit for the quarter ended December 31, 2010 at Rs 69.53 crore, helped by a robust performance in the rural areas.
The company had posted a net profit of Rs 62.20 crore in the corresponding period previous year, Marico said in a filing to the Bombay Stock Exchange (BSE).
The net sales during the third quarter of this fiscal also jumped by 22.13 per cent to Rs 817.74 crore from Rs 669.57 crore in the year-ago period, it added.
The company said it witnessed a volume growth of about 15 per cent during October-December period of last year.
In order to minimise the impact of high input costs, the company hiked the prices of select stock-keeping units (SKUs) during the second and third quarter of the fiscal.
"This has led to an inflationary impact on the top line. Pricing power of brands enabled the company to pass on a part of input cost increase to consumers. The company is, however, conscious of the long-term growth potential in the Indian market," Marico said.
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The company has, therefore, focused more on retaining consumers and continuing to provide the impetus to grow the market, particularly in coconut oil.
Consequently, it has chosen a temporary contraction in operating margins to ensure longer term growth, it added.
The firm's overall growth in consumer product business was about 19 per cent, while the underlying volume growth was about 10 per cent.
"The company has been taking initiatives to drive rural growth and as a result the growth was about 28 per cent, as compared to urban growth of about 17 per cent. The share of rural sales to total has hence grown to about 27 per cent in Q3FY'11," the filing said.
The international business during the quarter soared by about 33 per cent top line growth and about 25 per cent volume jump. "However, appreciation in the Indian Rupee has resulted in a reported growth of 28 per cent."
As on December 31, 2010, the Marico Group has a net debt of Rs 116 crore and the average cost of the debt is about 5.5 per cent, it said.
"The company may roll over some of the loans, when they fall due, during the year or redeem investments for repayment."
Besides, the company said its board has approved re-appointment of Harsh Mariwala as the Chairman and Managing Director of the firm for the next five years with effect from April 01, 2011.
Reacting to the numbers, the shares of the company were trading 0.60 per cent up at Rs 125.25 a piece during afternoon on the BSE.