Marico Defies Second Covid Wave Slump

Marico Ltd. defied the second wave of the pandemic even as at least two of its peers saw revenue and profit fall in the first quarter.

The maker of Parachute hair oil and Saffola cooking oil witnessed strong demand even from rural areas in the April-June, Saugata Gupta, managing director and chief executive officer at Marico, said in an interview with BloombergQuint.

A bit of demand would have petered out, he said. “But what essentially happened is that the impact would have been largely on the discretionary part of the FMCG portfolio, not essential,” he said. “So I would say that a lot of large brands would have gained market share.”

As much as 90% of Marico's portfolio continues to gain market share, he said. Marcio's share in Parachute coconut oil went up by 80 basis points over a year earlier as of June. For value-based hair oils, it rose by 70 basis points.

Marico had said in its quarterly results update that unlike the first wave, the pandemic's second surge affected deeper pockets of the country. “But supply chains were able to weather localised and staggered lockdowns and retail stores operated for certain number of hours during the day.”

Q1 Highlights

Marico reported a volume growth of 21% over a year earlier in the quarter ended June. The year-ago period coincided with a complete nationwide lockdown.

• Revenue rose 25% sequentially to Rs 2,525 crore.

• Net profit attributable to shareholders stood at Rs 356 crore, up 63% over the preceding quarter.

• Ebidta jumped 51% to Rs 481 crore, up 51%.

• Margins rose to 19% against 15.9% as of March.

Earnings were aided by a 13% sequentially decline in copra prices even costs rose for its peers.

In results so far for the April-June quarter, Nestle India Ltd.'s profit and revenue fell sequentially, and margin contracted. Hindustan Unilever Ltd., too, saw its earnings and revenue decline and margin narrow. Britannia Industries Ltd.'s net profit rose but missed estimates as margin narrowed.

Watch Saugata Gupta, MD & CEO Marico speak about the road ahead for the FMCG major: