Marico Q4 update: Consumption trends subdued; sees marginal growth in profit

Fast-moving consumer goods (FMCG) company Marico on Tuesday said that consumption trends remained subdued during the January-March quarter of financial year 2021-22 amidst weak rural sentiment and inflation in global commodities aggravating due to geo-political tensions.   While companies effected price hikes across FMCG categories to cope with the cost-push, persistent inflation continued to hurt consumer wallets across rural and urban, the company informed the stock exchanges in its quarterly update.   "Despite the challenging macro context, the India business stayed relatively firm, riding on focused execution and market share gains. Revenue growth in the quarter was in low single digits, while volumes were marginally positive on an exceptionally high base (25 per cent), leading to a double-digit volume growth on a 2-year CAGR basis," it said.   While Parachute coconut oil volumes were marginally lower year-on-year, mainly due to a high base, value added hair oils grew in low single digits in value terms and continued to deliver as per medium term aspirations over a 2-year time frame, the company said.   "The Saffola franchise grew in high teens in value terms, with foods growing healthily. Premium personal care posted broad-based double-digit growth. Digital-first brands, Beardo and Just Herbs, also performed in line with expectations," it added.   On its international business, Marico said it registered double-digit constant currency growth on a strong base, with all markets faring well. The business registered a mid-teen constant currency growth in FY22.   The consolidated revenue growth in the quarter touched high single digits, it said.   "Among key inputs, copra prices remained soft, however edible and crude oil prices spiked due to geopolitical tensions. In response, the company also took calibrated price increases in the value added hair oils and Saffola edible oils portfolios during the quarter. Consequently, gross margin is expected to be at similar levels as the same quarter last year," the company said.   Marico said its advertising and promotional spending was higher on a year-on-year basis, as it maintained investments towards strategic brand building of core and new franchises. In view of all these, the company expects a marginal growth in profit in the quarter.   The FMCG company had reported a marginal increase of 1.6 per cent in its consolidated net profit to Rs 317 crore for the third quarter ended December 2021.