Marico reported 13.2% rise in the net profit to Rs 257 crore on a 7.4% increase in net sales to Rs 2,161 crore in Q4 FY22 over Q4 FY21.
Profit before tax grew 13.8% to Rs 322 crore in Q4 FY22. EBITDA was up by 11% year on year to Rs 354 crore in the quarter ended 31 March 2022. EBITDA margin improved by 53 basis points to 16.4% in Q4 FY22.Marico said that the domestic business stayed steady in a challenging consumption environment and the international business posting healthy double-digit revenue growth.
The International business sustained its strong momentum of predictable and profitable growth. The business delivered 12% constant currency growth in the quarter with each of the Bangladesh, South Africa and MENA businesses clocking double-digit constant currency growth, the company stated. Bangladesh clocked 16% constant currency growth. Vietnam grew 7% in constant currency terms. MENA and South Africa grew 11% and 20% in constant currency terms.
The company said that the rising inflation levels, exacerbated by geo-political tensions, continued to weigh down the overall consumption sentiment, and even more so in rural. As companies resorted to taking price hikes to counter the persistent input cost push, consumers continued to feel the pinch. As a result, FMCG market continued to decline in Q4 in volume terms.
Copra prices remained soft, while crude and edible oil prices hardened given the linkage to global markets. A&P spends (at 9.4% of Sales) was up 18% YoY, as the company prioritized investments in brand building for the long term over immediate margin considerations. EBITDA margin stood at 16.4%, up 53 bps YoY, Marico added.
Marico said parachute rigids was down 1% in volume terms on the steep base of 29%. The volume market share of the brand rose by 170 bps in rigid packs (MAT Mar'21), thereby maintaining its stronghold in the branded coconut oil category. Value added hair oils delivered value growth of 3% in Q4, maintaining the double-digit growth trajectory on a 2 year CAGR basis. The company gained 90 basis points in value market share during the quarter.
More From This Section
The Saffola franchise, comprising refined edible oils and foods, grew 17% in value terms. Saffola edible oils had a flat quarter in volume terms but grew in double-digits in value terms. The brand also ended flat in volume terms in the full year on a high base of 17%, despite significant volatility in input costs and weak trade sentiment during the year.
Saffola foods grew by 17% in Q4 in value terms on the back of both core and new franchises growing healthily. Saffola honey continued to consolidate its market share in MT and E-com channels and Saffola mealmaker soya chunks scaled ahead of internal targets. During the quarter, the company continued to broaden its play in foods with the launch of Saffola peanut butter (made with jaggery and no refined sugar) and Saffola mayonnaise (eggless and with milk cream). Both offerings are available online and will be soon be present in offline channels as well. With these launches, we have further expanded the total addressable market of the brand Saffola to Rs 6,000 crore, stated Marico.
Premium personal care (contributing less than 5% of revenues) grew in high double digits in Q4, with both Livon serums and male grooming growing at more than 20% each. Beardo crossed the Rs 100 crore exit run rate and Just Herbs scaled up in line with expectations.
Copra prices were down 9% sequentially and down 31% YoY. With the onset of the flush season, prices should remain range-bound in the near term. Following the recent spike in global edible oil prices, Rice Bran oil was up 26% YoY and 6% sequentially. Marico expects edible oil prices to remain at elevated levels in the coming quarters. Crude derivatives such as Liquid Paraffin (LLP) and HDPE were up 9% and 19% YoY. Both are also likely to remain firm in the near term, Marico added.
On full year basis, Marico reported a 4.5% rise in the net profit to Rs 1,225 crore on an 18.2% increase in the net sales to Rs 9,512 crore in the financial year ended 31 March 2022 over the financial year ended 31 March 2021.
Commenting on the future outlook, Marico said, We expect the stress on demand and margins to ease towards the second half of next year. Over the medium term, we hold our aspiration to deliver 13-15% revenue growth on the back of 8-10% domestic volume growth in the domestic business and double-digit constant currency growth in the international business. We will aim to maintain consolidated operating margin above the threshold of 19% over the medium term.
Marico further said, In Parachute rigids, we expect to grow volumes in the range of 5-7% over the medium term, given the market construct and strengthening brand equity. In value-added hair oils, we aim to sustain double-digit value growth over the medium term. Driving value share gains ahead of volume share in the overall portfolio through mix improvement and innovations in the premium segment will be our key focus over the medium term. In Saffola edible oils, we expect to deliver high single-digit volume growth over the medium term. The foods franchise had a robust year to end above 450 crores in revenues this year. We aim to scale this up to Rs 850-1000 crore by FY24 on the back of innovation, distribution and market development.
The company lastly added, We will build the premium personal care portfolios into growth engines of the future and deliver double-digit value growth over the medium term in these portfolios. We aim to accelerate our digital transformation journey by building a portfolio of at least three digital brands, either organically or inorganically, with a combined turnover of Rs 450-500 crores by FY24. Beardo and Just Herbs are conscious steps in this direction.
Shares of Marico were trading 1.44% lower at Rs 512.95 on the BSE.
Powered by Capital Market - Live News