Marico reported consolidated revenues of Rs 2,477 crore in Q1FY24 against Rs 2,558 crore, corresponding quarter previous year. While revenues reported 3% YoY fall in June Quarter 2023, net profit increased 15% YoY at Rs 427crore.
Domestic revenues came in at Rs 1,827 crore down 5% YoY in Q1FY24. Lower revenue growth was due to pricing interventions in key domestic portfolios last year and further price reduction in Saffola Oils in June Quarter2023. According to the management, sales channels, modern trade (MT) and ecommerce grew in double digits, while general trade declined in mid-single-digits in Q1FY24.
Marico’s product categories include hair oils, foods and premium personal care. The company’s core product portfolios are parachute rigids, value-added hair oils and saffola franchise. The together constitute 83% of total domestic revenues.
Parachute Rigids reported volume decline of 2% and value-added hair oils had a flat quarter amidst slower recovery in mass personal care categories. Saffola edible oils registered a low double-digit volume growth, on a negative base, mainly due to reducing inventory levels as vegetable oil prices experienced a sharp downturn. Price decline was nearly 30% YoY.
Foods continued its healthy scale up with 24% value growth YoY, aided by steady growth in core and newer franchises. Saffola Oats maintained its market leadership. According to the management, newer categories of honey and soya chunks are gaining scale, while peanut butter, mayo and munchiez have seen encouraging traction. The management expects to reach the ₹850 crore-revenue mark in foods category in FY24. Marico’s premium personal care segment delivered a steady performance in June Quarter 2023. Marico aims to achieve 10% domestic revenues from composite portfolio of foods and premium personal care in FY24.
Marico has recently signed definitive agreements to acquire upto 58% of the paid-up share capital of Satiya Nutraceuticals which owns “The Plant Fix- Plix”, a digital-first, clean label, plant-based nutrition brand. The acquired portfolio includes vegan, gluten-free offerings and also other weight management, hair & beauty, sleep and lifestyle nutrition categories. Plix has established itself as one of the leading players in the online plant-based nutrition segment.
The International business continued its strong momentum and delivered constant currency growth of 9%, amidst macroeconomic and currency devaluation headwinds in some of the geographies. Bangladesh clocked 9% constant currency growth (CCG) with a broad-based performance across core and newer portfolios. Vietnam registered 5% CCG, subdued by the impact of the economic slowdown on the HPC category in the region. MENA delivered 15% CCG and South Africa grew 37% in CCG terms. NCD and Exports businesses registered 24% growth.
The management expects revenue growth to move into positive territory in H2FY24, as pricing deflation in the domestic portfolio bottoms out and tapers off through the rest of the year. The international business is on a robust growth trajectory, despite global macroeconomic headwinds. The management expects international business to maintain double-digit growth momentum in FY24. In view of softening input costs, institutionalized cost management initiatives and a more favorable portfolio mix, gross margin is expected to expand by 250-300 bps and operating margin to move up by more than 150 bps to 20% levels in FY24.
