New Delhi, Oct 29 (PTI) Homegrown FMCG major Marico Ltd on Tuesday reported a 20.27 per cent increase in consolidated net profit to Rs 433 crore for the September quarter, helped by volume growth, pricing actions and gains from the sale of fixed assets.
It had posted a net profit of Rs 360 crore in the July-September quarter a year ago, according to a regulatory filing by the company.
During the quarter, Marico witnessed "stable demand trends in India with rural growing at 2x the pace of urban on a year-on-year basis", it added.
The company's consolidated revenue from operations was up 7.6 per cent to Rs 2,664 crore during the quarter under review. It was at Rs 2,476 crore a year ago.
The growth in revenue from operations was "with underlying volume growth of 5 per cent in the domestic business and constant currency growth of 13 per cent in the international business", Marico said in its earning statement.
The reported "PAT was up 20 per cent due to one-off gains, on the sale of fixed assets and favourable settlement of a past litigative claim amounting to Rs 42 crore," Marico said, adding its "PAT excluding one-offs was up 10 per cent".
Pricing growth for the sector turned positive on a year-on-year basis as brands affected price increases in response to rising commodity prices, said Marcio, which owns popular brands like Saffola, Parachute, Livon, etc.
Marico's total expenses increased 7.65 per cent in the September quarter to Rs 2,194 crore, while its total income -- which includes other income -- was up 9.22 per cent to Rs 2,746 crore.
Domestic revenue of the Harsh Mariwala-led company was up 8.02 per cent to Rs 1,979 crore.
This growth in the domestic market was led by a "volume growth was supplemented by price hikes in the coconut oil portfolio and favourable reversal in the pricing cycle in Saffola Oils," it said.
"The domestic business maintained its improving volume growth trajectory on the back of healthy trends across most of the core and new franchises. Offtakes remained strong as more than 80 per cent of business either gained or sustained market share and penetration both on a MAT basis," it said.
Its Parachute business registered 4 per cent volume growth and recorded 10 per cent revenue growth, aided by pricing interventions made at the start of the year.
However, its Saffola Edible Oils delivered flattish volumes, while revenues grew 2 per cent year-on-year after the pricing cycle for the brand turned slightly favourable after eight quarters. Moreover, its value-added hair oils declined 8 per cent year-on-year in value terms amidst persistent sluggishness and competitive headwinds in the bottom of the pyramid segment.
Marico's foods business, where it sell Saffola oats, honey, healthy snacking, immunity, plant-based protein and nutraceuticals, etc, posted a 28 per cent value growth year-on-year and crossed Rs 1,000 crore in annual recurring revenue (ARR) in the second quarter of the ongoing fiscal year.
Similarly, its premium personal care continued its strong run during the quarter, led by the digital-first portfolio. The digital-first brands crossed Rs 525 crore in ARR in the September quarter.
"The composite revenue share of foods and premium personal care (including digital-first brands) in the domestic business moved up to 21 per cent in H1," said Marico.
Marico's revenue from the international market was up 6.36 per cent to Rs 685 crore.
"In Bangladesh, Marico registered an 8 per cent constant currency growth as the business stayed resilient amidst challenges in the operating environment, which progressively subsided in the latter half of the quarter," it said, adding that Vietnam, MENA, and South Africa also posted growth.
On the outlook, Marico said it will continue to aggressively diversify the portfolio through the scale-up of foods and premium personal care portfolios.
"After successful initiatives towards refinements in supply chain and GTM during FY24, we aim to grow foods at 20-25%+ CAGR to 2x of FY24 revenues in FY27. The digital-first portfolio is expected to exit FY25 at an ARR of Rs 600 crore and scale to 2x of FY24 ARR in FY27," it said.
It expects the consolidated revenue growth to move into double digits in the second half of the fiscal year.
"In view of the higher-than-anticipated degree of inflation in copra prices and sharp import duty hike in vegetable oils, the company will focus on its stated revenue growth aspiration while remaining watchful on the margin front during the second half of the year," it said.
Shares of Marico Ltd on Tuesday settled at Rs 628.80 per scrip on the BSE, down 0.83 per cent from its previous close. PTI KRH TRB