Marico Q3 net profit rises 5% to Rs 333 cr; revenue up 2.6% to Rs 2,470 cr

Home-grown FMCG major Marico Ltd on Friday reported a 5.04 per cent increase in consolidated net profit at Rs 333 crore in the third quarter that ended December 31, 2022.

The company had posted a net profit of Rs 317 crore in the October-December quarter a year ago, Marico said in a regulatory filing.

Its revenue from operations was at Rs 2,470 crore, up 2.61 per cent during the quarter under review, as against Rs 2,407 crore a year ago.

In the third quarter of FY23, revenue from operations grew "with underlying volume growth of 4 per cent in the domestic business and constant currency growth of 8 per cent in the international business," said Marico in an earnings statement.

Marico's total expenses were at Rs 2,067 crore, up 2.22 per cent in the third quarter of this financial year.

Its revenue from the domestic market was up 1.87 per cent to Rs 1,851 crore in the third quarter of FY23. It was Rs 1,817 crore a year ago.

"During the quarter, the FMCG sector in India showed some signs of a gradual improvement in overall demand trends, in addition to the festive spirit and oncoming winter season providing some fillip to specific categories," it said.

The underlying domestic volume growth in Q3 was 4 per cent.

"On a 3-year CAGR basis, quarterly domestic volume growth stood at a healthy 6 per cent. Sustained focus on execution and brand building investments translated into key franchises consolidating market shares during the quarter," it said.

Sales from its Parachute Rigids were up 2 per cent in volume terms after a tepid last few quarters and Saffola franchise, comprising Refined Edible Oils and Foods, grew by 10 per cent in value terms.

Marico's food business grew 31 per cent in value terms, however, value-added hair oils posted a value decline of 3 per cent.

Marico's sales from channels such as general trade declined in mid-single digits and rural is still behind urban.

While sales from modern trade channels and e-commerce grew in high double digits, it added.

Marico's revenue from the international business was at Rs 619 crore, up 4.91 per cent in the third quarter of FY23.

"Bangladesh clocked 9 per cent constant currency growth. Both the core and newer portfolios remained steady. Vietnam grew by 13 per cent in constant currency terms. Both MENA (Middle East and North Africa) and South Africa grew by 13 per cent in constant currency terms," it said.

About the outlook, Marico said it will maintain focus on driving penetration and market share gains across portfolios aided by distribution expansion, cost controls, and investment in market development and brand building.

"Prominent green shoots in rural are eagerly awaited as an encouraging winter crop-sowing season, indications of higher farm income and continued government stimulus bode well. We expect to maintain an improving growth trend in the quarters ahead," it said.

Marico expects gross margin should remain steady with an upward bias going ahead.

"Taking into account the quarterly gyrations of all cost line items, EBITDA margin will be in the 18-19 per cent band in FY23," it said.

Shares of Marico Ltd on Friday settled at Rs 493.50 apiece on BSE, down 1.22 per cent from the previous close.