Marico Q3 Results: Profit Steady, Margin Contracts On High Inflation

Marico Ltd.'s quarterly profit remained steady but margin contracted amid poor consumption as inflation hurt purchasing power.

Net profit of the Parachute coconut hair oil maker rose 1% over the preceding year to Rs 310 crore in the quarter ended December, according to its exchange filing. That compares with the Rs 314.72-crore consensus estimate of analysts tracked by Bloomberg.

Highlights (YoY)

• Revenue was up 13% to Rs 2,407 crore, in line with the forecast.

• Operating profit rose 4% to Rs 431 crore, compared with the estimated Rs 421.51 crore.

• Margins stood at 17.9% against 19.5%. Analysts had projected 17.5%. It, however, improved 42 basis points sequentially.

Marico, its quarterly update earlier this month, had said volumes remained largely unchanged in the quarter on weak demand. Inflation, it said, was especially hurting rural households.

In comparison, Hindustan Unilever Ltd., the nation's largest consumer goods maker, too, saw slow volume growth during the third quarter due to rural slowdown, grammage cuts and high inflation.

Unlike HUL and Colgate-Palmolive India Ltd., advertising spends of Marico remained high, up 14% over the year earlier.

Marico also declared a second interim equity dividend of Rs 6.25 per equity share of Re 1 each for the current financial year.

Shares of Marico closed 2% higher before the results were announced compared with a flat Nifty 50.