 "FMCG, Marico, Parachute")
India's Marico reported better-than-expected third-quarter profit on Monday, as declining raw material costs outweighed a drop in revenue.
The consumer goods manufacturer reported a net profit of Rs 383 crore ($46.1 million), up nearly 17% from last year, and surpassing analysts' estimate of Rs 374 crore as per LSEG data.
The company's total expenses declined about 5% to Es 1,970 crore, as cheaper dried coconut or copra, edible oils and crude derivatives brought input costs down 21.6%.
As a result, its earnings before interest, taxes, depreciation, and amortisation (EBITDA) margin expanded to 21.2% from 18.5% last year.
Marico's revenue, however, dipped 2% to Rs 2,422 crore, aligning with its forecast earlier this month which predicted a low single-digit revenue decline due to weaker rural demand.
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Sales of "Parachute" coconut oil, which it says accounts for 34% of domestic revenue, grew 3%. Sales of "Saffola" edible oils fell while that of hair oils grew, the company said without specifying the numbers.
The company said it remained optimistic of a demand recovery this calendar year, citing improving macroeconomic indicators, government spending, and "conducive" consumer pricing amid a "benign input cost environment."
Earlier this month, rival Hindustan Unilever reported profit below estimates as competition in the consumer goods space heated up and demand in rural regions remained low.
Marico's shares fell 2.3% during the December quarter, compared with a 10.4% gain in the Nifty consumer goods index.
