Marico Q2 Update: FMCG Major Sees 30% Revenue Growth On Pricing Interventions
International business has sustained a robust momentum, with constant currency growth touching the "twenties", Marico said.
Marico Ltd. on Friday said that it saw a stable second quarter in terms of demand, and further expects consumer sentiment to gradually improve during the upcoming festive season and months ahead, "aided by easing inflation, above-average monsoons, healthy crop outlook and policy stimulus".
The FMCG giant, in its business update for the second quarter, said it expects consolidated year-on-year revenue growth to touch the "thirties", on the back of pricing interventions and mix improvement, thereby "closing the first half of the year on a strong note and staying well on course to achieve the full year aspiration."
Marico also noted that despite absorbing the transitory impact of disruption in trade channels ahead of the implementation of new GST rates in September, the underlying volume growth in the India business remained in high-single digits.
Additionally, it noted that the international business has sustained a robust momentum with constant currency growth touching the "twenties".
The filing stated, "Bangladesh and MENA businesses visibly outperformed, while other markets were steady in their course."
As far as the segment wise growth is concerned, Saffola oils delivered flattish volumes with a high base and revenue growth in the high teens, whereas value added hair oils gave high teens growth, signalling a sustained recovery path.
According to the filing, foods and premium personal care, inclusive of digital-first brands, sustained an accelerated scale up and "kept up the pace of diversification."
The FMCG major added that among other key segments, "copra prices remained rangebound after correcting 10-12% from the highs. Vegetable oil prices also sustained high levels, while crude oil derivatives were benign."
Due to this the company expects mounted pressure on gross margin "on a relatively high base and partly due to the pricing-led high denominator effect".
Marico stated that it expects the pressure to be relieved in the second half of the fiscal year.
The company, however, noted that it expects modest operating profit growth on a year-on-year basis. This is due to the extended discounts in the two weeks leading up to the new GST rates coming into practice to its channel partners on the pipeline inventory, it added.
On Friday, the shares of Marico settled 1.43% higher at Rs 710.65 apiece on the NSE.
