Near-term investor sentiment may not be high on Marico's slow Q2 growth

While the company may lower its FY20 volume growth guidance amid muted offtake in September quarter, benign copra prices should push up profit margins

As Marico, the maker of hair and edible oil brands like Parachute and Saffola, clocked a better volume growth of 6 per cent in the June 2019 quarter, it kept investors’ hopes high. Despite some recent underperformance post the cut in corporate tax rates, the company’s share price has outperformed (up nearly 7 per cent) the Nifty FMCG index (up 5.3 per cent) in the last three months. However, keeping investor sentiment elevated in the near term may not be easy for Marico because of slower growth in the September 2019 quarter (Q2).

“Product offtake, across categories, was softer throughout the