Marico Q3 Business Updates: Mid-Teen Revenue Growth Seen Amid Elevated Input Costs
Marico expects modest operating profit growth, in the backdrop of rising input costs that weighed on gross margin.
Marico Ltd., while sharing the business update for the October-December quarter, said the company's consolidated business "delivered mid-teen revenue growth on a year-on-year basis".
The company flagged the elevated raw material prices, saying that the rising trend in input costs is "expected to result in a higher-than-anticipated gross margin contraction", it added.
Among key inputs, copra prices remained firm at higher-than-expected levels and vegetable oil prices moved up during the quarter, while crude oil derivatives remained rangebound, the company said.
The fast-moving consumer goods major expects "modest operating profit growth on a year-on-year basis".
The consolidated performance during the quarter keeps the company on course to meet the "double-digit growth aspiration on a full-year basis", Marico said.
During the quarter, steady demands trends were witnessed on the back of "improving rural consumption and stable sentiment in urban vis-à-vis the preceding quarter", it added.
In this backdrop, the company said it will focus on its "stated volume-driven revenue growth aspiration" while remaining watchful on the margin front in the near term.
Uptick In Domestic Business
"The domestic business posted a sequential uptick in underlying volume growth with sustained market share gains across key franchises," Marico said in the business update, which was shared with the exchanges.
Parachute Coconut Oil, one of the key products among Marico's offerings, was resilient amidst the rising input cost and pricing environment, albeit slightly moderating in volume terms on a sequential basis, it added.
"The brand recorded low teen revenue growth, aided by pricing interventions during the current year. The brand has taken another round of price increase towards the end of this quarter as copra prices remained firm," it stated.
In the edible oils segment, Saffola Oils held firm in volume terms despite steep pricing interventions in response to the rise in vegetable oil prices. The brand posted "high teen revenue growth", Marico said.
Meanwhile, Marico's "foods and digital-first brands sustained their strong growth momentum" and continued to deliver well-ahead of aspirations, the company stated in the quarterly business update.
International Business Growth
The company's international business delivered "broad based mid-teen constant currency growth", Marico said.
Bangladesh, a key market for the FMCG major, continued to demonstrate visible strength and resilience with high double digit constant currency growth, it said.
"Vietnam had a soft quarter in a sluggish consumption environment. MENA (Middle East and North America) and South Africa maintained their robust double digit growth momentum," the company added.
