Marico, one of India’s leading consumer products companies in the global beauty and wellness space, released its Q3 FY24 (third-quarter) business update today. The company’s domestic volumes in Q3FY24 grew in low single digits on a year-on-year basis, with low single-digit volume growth in Parachute Coconut Oil and Saffola Edible Oils, along with low single-digit value growth in Value Added Hair Oils.
The international business delivered mid-single-digit constant currency growth amidst transient macro headwinds in the Bangladesh market, while the rest of the geographies held strong, the company said.
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Its consolidated revenue was marginally lower on a year-on-year basis in Q3FY24, dragged by pricing corrections in the key domestic portfolio and significant currency depreciation in select overseas geographies, its update showed.
The company expects robust gross margin expansion on a year-on-year basis in Q3FY23, owing to a drop in key input prices. Consequently, it expects low double-digit operating profit growth on the back of a healthy expansion in operating margin. This positions the company well to meet its full-year margin guidance.
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Marico maintains its aspiration of delivering sustainable and profitable volume-led growth over the medium term, enabled by the strengthening brand equity of its core franchises and scale-up of new engines of growth.
Looking ahead, the company remains optimistic about a gradual uptick in consumption trends in CY24 on the back of improving macroeconomic indicators, continued government spending, and conducive consumer pricing across categories in response to a benign input cost environment.
During FY 2022–23, Marico recorded a turnover of ₹97.6 billion (USD 1.2 billion) through its products sold in India and chosen markets in Asia and Africa.
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Industry Outlook
Meanwhile, domestic brokerage firm Nuvama Institutional Equities in its latest Consumer Staples sector update report stated that rural demand would continue to be difficult in Q3FY24, which could hinder the volume growth of the fast-moving consumer goods (FMCG) industry.
“Rural volumes will trail urban volumes and are expected to remain flat or experience a slight decline year over year (YoY). Rural stress is reflected in the high rate of unemployment and the demand for NREGS. Value sales will also be muted because categories are deflating as a result of higher gross margins,” the brokerage said.
Marico shares finished today’s trade with a drop of 1.40% at ₹546 apiece.
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Published: 05 Jan 2024, 05:10 PM IST