Marico Q2 Results: Profit Flat At Rs 420 Crore, Margins Contract

Marico Ltd.'s profit rises 0.7% to Rs 420 crore in the second quarter of this financial year. This is in comparison to profit of Rs 423 crore in the previous quarter of this fiscal, according to its stock exchange notification on Friday.

Revenue advanced by 30.7% year-on-year for the three months ended September, reaching Rs 3,482 crore. Operating income, or earnings before interest, taxes, depreciation, and amortization rose 7.3% year-on-year to Rs 560 crore.

The Ebitda margin contracted to 16.1%, on a particularly high base, as sharp inflation in key commodities also exerted incremental pressure in this quarter.

• Revenue rises 30.7% at Rs 3,482 crore versus Rs 2,664 crore.

• Ebitda up 7.3% at Rs 560 crore versus Rs 522 crore.

• Margin at 16.1% versus 19.6%.

• Net Profit falls 0.7% to Rs 420 crore versus Rs 423 crore.

"We witnessed steady demand trends in India during the quarter, except for the transitionary disruption in trade channels ahead of the implementation of new GST rates in the month of September," the company said in a press release on Friday.

The India business revenues stood at Rs 2,667 crores, up 35% year-on-year, aided by price hikes in core portfolios in response to sharp inflation in key input costs.

Offtake growth also remained strong, with more than 95% of the business gaining or sustaining market share and more than 75% of the business gaining or sustaining penetration, both on MAT basis.

The international business maintained its robust growth trajectory with 20% constant currency growth, demonstrating its strong fundamentals and sustained growth potential.

Parachute Rigids posted a volume decline of 3%, amidst headwinds posed by unprecedented hyperinflation in copra prices. After normalizing for ml-age reductions in lieu of price increases, the brand was flattish in volume terms.

Revenue growth for the brand stood at 59%. While copra prices remained rangebound after correcting 15% from peak levels in early Q2, the company expects Parachute to remain steady and reinforce its competitive edge on the back of its formidable brand strength and scaled back-end capabilities.

Value-Added Hair Oils grew by 16% in value terms, marking the second consecutive quarter of double-digit growth and sustaining the pace of recovery despite the aforesaid impact of the GST transition.

Saffola Edible Oils had a flattish quarter in volume terms amidst a relatively elevated pricing environment. The brand registered 19% revenue growth.

Foods grew 12% year-on-year and crossed the Rs 1,100 crore mark in annualised run rate.

Premium Personal Care sustained its accelerated growth trajectory, led by the Digital-first portfolio.

Owing to the strengthening growth construct of the business, Marico maintains its double-digit revenue growth in the medium term. It also expects double-digit constant currency growth in the International business.

Marico expects operating margin to inch up over the medium term, with leverage benefits as well as premiumisation of the portfolios across both the India and International businesses