Marico rose 1.46% to Rs 215.25 at 14:07 IST on BSE after consolidated profit after tax rose 25% to Rs 106 crore on 5% increase in revenue to Rs 1118 crore in Q2 September 2013 over Q2 September 2012.
Marico announced the result during trading hours today, 29 October 2013. The result comprises FMCG business only (domestic and international). The scheme of demerger has been sanctioned by the Bombay High Court and therefore Marico reported numbers, henceforth, will not include those of the Kaya business (effective 1 April 2013).
Meanwhile, the BSE Sensex was 325.69 points, or 1.58%, to 20,895.97.
On BSE, 1.91 lakh shares were traded in the counter compared with average volume of 1.64 lakh shares in the past one quarter.
The stock hit a high of Rs 221 and a low of Rs 210.60 so far during the day. The stock hit a record high of Rs 251.10 on 31 May 2013. The stock hit a 52-week low of Rs 190.50 on 25 June 2013.
The stock had underperformed the market over the past one month till 28 October 2013, sliding 3.35% compared with the Sensex's 4.27% rise. The scrip had also underperformed the market in past one quarter, sliding 2.26% as against Sensex's 4.16% rise.
The large-cap FMCG company has an equity capital of Rs 64.49 crore. Face value per share is Re 1.
Marico said revenue growth was driven by growth in volumes of about 4% in each of the domestic and international businesses.
The profits of Q2 September 2013 are not comparable to Q2 September 2012. During Q4 March 2012, the company changed its method of depreciation as a result of which the depreciation charge for Q2 September 2013 is lower by Rs 2.94 crore when compared to Q2 September 2012. The post-tax impact in Q2 September 2013 is Rs 1.94 crore.
The company said that the FMCG business has continued to grow in volumes and profits along with sustained improvements in market shares. In India, softening in the sector due to the general consumer price inflationary trend and restricted spends on discretionary products has impacted the company's growth rates. Moreover, growth in the primary sales during the current quarter was low due to a one time paring down of stocks in the trade as the value growth is lagging volume growth and inflation in distribution costs. It should also be noted that the growth in secondary sales is as per company's expectations given the overall economic situation.
In Q2 September 2013, Marico said it recorded market share gains across portfolios and across geographies. Marico Group operating margins improved to 15% with Marico International (IBG) earnings before interest taxes depreciation and amortization (EBITDA) margins at 16.7% and Marico India (domestic FMCG) EBITDA margins at 17.6%, before corporate allocations.
Marico's FMCG business in India achieved a turnover of Rs 804 crore during the quarter, a growth of about 1% over Q2 September 2012.
International FMCG business reported a turnover of Rs 314 crore during the quarter, a growth of about 14% over Q2 September 2012. The overall volume growth during the quarter in the international FMCG business was 4% with operating margins at 16.7%. The company believes that this margin level is higher than sustainable levels.
Marico said it will focus on deriving synergies as a result of the combination of domestic and international FMCG businesses. It expects top line growth in the region of 15% to 20% in the medium term with an operating margin in the band of 14% to 15%. The company said it will focus on building capabilities to set it up for growth in the long run.
Marico is a leading Indian group in consumer products & services in the global beauty and wellness space. Marico's brands and their extensions occupy leadership positions with significant market shares in most categories - coconut oil, hair oils, post wash hair care, hair gels/creams, anti-lice treatment, premium refined edible oils, niche fabric care etc. Marico's branded products are present in Bangladesh, other SAARC countries, the Middle East, Egypt, South Africa, Singapore, Malaysia and Vietnam.
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