Marico's domestic biz sees modest volume growth in Q1

During the quarter, the FMCG major said that its domestic business saw a modest uptick in underlying volume growth on a sequential basis.

Marico added that this volume growth was delivered post adjustments in distributor stock levels to enhance their ROI and a certain degree of wholesale channel destocking to ensure smoother direct reach expansion through project SETU.

In Q1 FY25, Parachute Coconut oil posted low single-digit volume growth, but is likely to pickup visibly through the rest of the year given the consistently healthy trends in offtake growth, said the firm.

Saffola oils delivered mid-single digit volume growth amidst marked stability in input and consumer pricing. Value Added Hair oils had a soft start to the year due to competitive headwinds persisting in the bottom of the pyramid segment, while the mid and premium segments fared relatively better. The company expects the portfolio to revert to growth from the next quarter.

 

Foods and digital-first brands sustained their robust momentum and scaled up well ahead of stated aspirations.

Maricos international business delivered double-digit constant currency growth, driven by resilient and broad-based growth across markets.

Consolidated revenue grew in high single digits, despite the residual impact of pricing cuts in the Saffola oils portfolio and currency headwinds in overseas markets.

The FMCG company expects consolidated revenue growth to trend upwards during the year, on the back of an improving trajectory in domestic volume growth and higher realizations due to the favourable pricing cycle in key domestic portfolios.

Among key inputs, copra prices stayed firm in line with forecasts, while edible oil and crude oil derivatives remained rangebound. The company expects gross margin to expand on a year on year basis owing to a favourable portfolio mix.

Operating profit is expected to grow slightly ahead of revenue leading to a marginal inching up of operating margin on a year on year basis.

Earlier this month, the company announced that it will collaborate with renowned dermatological solutions provider, Kaya, to advance its play in science-backed personal care. This key strategic initiative will be an additional growth driver for Maricos premium personal care led digital business and further accelerate the portfolio diversification agenda of the India business, the company stated in the press release.

The company maintains its aspiration of delivering sustainable and profitable volume-led growth over the medium term, enabled by the strengthening brand equity of its core franchises and scale up of new engines of growth, it added.

Meanwhile, the board of Marico will consider Q1 results on Monday, 5 August 2024.

Marico is one of India's leading consumer products companies in the global beauty and wellness space. Its portfolio includes brands such as Parachute, Saffola, Saffola FITTIFY Gourmet, Saffola ImmuniVeda, Saffola Mealmaker, Hair & Care, Parachute Advansed, Nihar Naturals, Mediker, Coco Soul, Revive, Set Wet, Livon and Beardo.

The FMCG companys consolidated net profit jumped 14% to Rs 318 crore in Q4 FY24 as compared with Rs 302 crore in Q4 FY23. Revenue from operations increased 2% YoY to Rs 2,278 crore in Q4 FY24.

Shares of Marico gained 1.23% to end at Rs 615.30 on Friday, 5 July 2024.

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