Marico Ltd - Quarterly Update - Q3 FY23

During the quarter, the sector witnessed some improvement in demand, which was more visible in specific categories buoyed by the festive fervour and oncoming winter season. Urban and premium categories maintained their steady pace of growth. However, recovery in rural demand was not as discernible as retail inflation stayed at elevated levels. Easing of commodity inflation, higher crop realizations, ongoing government interventions and likely stimulus from the upcoming Union Budget augurs well for the sector in the forthcoming calendar year.

In the given context, the India business marked a slight improvement over the preceding quarter to post a mid-single-digit volume growth. Parachute Coconut Oil posted low single-digit volume growth after a visible recovery in December as consumer pricing stabilised with copra prices firming up in the off-season. Going forward, we expect the brand to deliver growth in line with medium term aspiration. The Saffola franchise grew in double digits in value terms with Saffola Oils posting low teen volume growth and Foods continuing its strong run towards the stated revenue aspiration. Value Added Hair Oils had a subdued quarter, which was mainly a reflection of tepid sentiment in rural and mass personal care categories. Premium Personal Care, on the other hand, witnessed double-digit growth in line with sectoral trends.

The International business continued its healthy growth momentum with high single-digit constant currency growth, even while contending with implications of currency depreciation and high inflation in key markets. Bangladesh held steady despite challenging macros, while the other markets performed well. Furthering our strategy of increasing the total addressable market in key markets, the acquisition of female personal care brands, Purité de Prôvence and Ôliv, will provide a fillip to the Vietnam business.

Consolidated revenue in the quarter grew in low single digits on a year-on-year basis.

As we witnessed some semblance of stability in key input prices and consumer pricing across key franchises, gross and operating margins are expected to improve both on a sequential and year-on year basis. In view of the lower revenue growth, we expect a modest growth in operating profit.

The Company 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 scaling up new engines of growth.

This update seeks to provide an overall summary of the operating performance and demand trends witnessed during the quarter ended 31st December, 2022. A detailed Information Update will follow this once the Board approves the financial results for Q3 FY23.

Shares of Marico Limited was last trading in BSE at Rs. 506.25 as compared to the previous close of Rs. 510.70. The total number of shares traded during the day was 48430 in over 1785 trades.

The stock hit an intraday high of Rs. 514.25 and intraday low of 505.25. The net turnover during the day was Rs. 24646924.00.

Source : Equity Bulls

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Marico INE196A01026 BusinessUpdate Quarterly Q3FY23