Marico PAT Up 18.7%

For the there months ended 31 March 2023, Marico’s profit after tax stood at ₹305 crore; though profit declined sequentially. The maker of Safolla edible oil and Parachute hair oil reported a 3.65% jump in consolidated revenue from operations to ₹2,240 crore in the fourth quarter of FY23 compared to ₹2,161 crore in reported in the year ago period. Sequentially, however, revenues declined 9.3%.

The company reported underlying volume growth of 5% in its domestic business and constant currency growth of 16% in the international business.

The fast moving consumer goods market reported “sustained recovery in consumption trends" during the quarter, the company said. “During the quarter, the prospects for a sustained recovery in consumption trends strengthened as the sector recorded low single digit volume growth in Q4 after five consecutive quarters of volume decline. In this context, the India business continued to better the performance of the preceding quarter with an underlying volume growth of 5%. Volume growth on a 4-year CAGR basis stood at 6%," the company said in its fourth quarter and full-year earnings announcement.

Citing data from market researcher Nielsen IQ, the company said that all India FMCG volumes for the industry grew 3.1% in the March quarter led by urban markets; in the December quarter FMCG volumes were down 0.3%.

Meanwhile, the company’s gross margin expanded 294 bps year-on-year and 247 bps sequentially. Advertising and marketing spends at 9.4% of sales, were up 3% year-on-year. EBITDA margin stood at 17.5%, up 153 bps year-on-year. EBITDA was up 14% YoY.

“FY23 ended on a reassuring note with improving trends across all performance parameters, accompanied by indications of a gradual sectoral recovery. The domestic business delivered a far more broad-based growth with visibly positive results in the portfolio diversification journey, while the international business continued to reinforce its underlying strength amidst a challenging operating environment," said Saugata Gupta, MD & CEO, Marico Ltd.

On Friday the company also announced the re-appointment of Gupta as the Managing Director & Chief Executive Officer for a term of two years with effect from 01 April, 2024 to 31 March, 2026, subject to approval of the shareholders. Marico also appointed Rajan Bharti Mittal as an additional director in the capacity of independent director for a term of five consecutive years effective July 1, 2023 to June 30, 2028. Gupta joined Marico in 2004 as the head of marketing and was elevated to CEO of India business in 2007. In 2014, he took over as Managing Director of the company.

During the quarter, Saffola edible oils reported mid-single digit volume decline on the back of a high volume base. The company’s foods business grew 18% in value terms to close near the ₹600 crore revenue mark in FY23.

In the near-term the company will drive volume led growth and market share gains in the India business across its portfolios, aided by distribution expansion, aggressive cost controls and adequate investment in market development and brand building. “We expect a gradual uptick in revenue growth as pricing interventions come into the base in the first half of FY24," the company said.

Marico holds its medium-term aspiration of delivering 13-15% revenue growth on the back of 8-10% domestic volume growth.