Marico Q1 net profit up 8.7% at Rs 474 crore

New Delhi: Homegrown FMCG major Marico Ltd on Monday reported an 8.71 per cent rise in consolidated net profit to Rs 474 crore for the first quarter ended June 30, helped by volume gains and gross margin expansion.

It had posted a net profit of Rs 436 crore a year ago, according to a regulatory filing by Marico.

The company's consolidated revenue from operations rose 6.7 per cent to Rs 2,643 crore during the quarter under review. It was Rs 2,477 crore in the year-ago period.

It has an "underlying volume growth of 4 per cent in the domestic business and constant currency growth of 10 per cent in the international business", according to an earning statement from Marico.

Marico's gross margin expanded by 230 bps year-on-year, and its advertising and promotion spending increased 13 per cent year-on-year in the June quarter.

The total expenses of Marico grew 6.08 per cent in the June quarter to Rs 2,075 crore.

Marico owns popular brands like Saffola, Parachute, and Livon.

Harsh Mariwala-led company's total income inched up 6.22 per cent at Rs 2,680 crore.

Its revenue from its domestic business rose 7.38 per cent to Rs 1,962 crore in the June quarter.

"Domestic revenue was Rs 1,962 crore, up 7 per cent YoY, as volume growth was supplemented by price hikes in the Coconut Oil portfolio, which more than offset the residual base impact of pricing cuts in the Saffola Oils portfolio," Marico said.

Offtakes remained healthy across key portfolios, with more than 90 per cent of the business either gaining or sustaining market share, it said.

Marico's international revenue grew 4.76 per cent to Rs 681 crore.

"The International business sustained its double-digit constant currency growth momentum, with each of the key markets delivering broad-based growth," it said.

On the FMCG industry, Marico said in the June quarter, overall volume trends in India continued to exhibit gradual improvement on a two-year CAGR basis, with the trajectory in rural markets bearing more promise, while urban was stable.

"Both HPC and Foods witnessed an uptick, although the pickup over the last 6 months has been more pronounced in the former," it said, adding that "premium segments continued to outpace mass segments, while alternate channels gained salience vis-a-vis General Trade (GT)".

Its MD and CEO Saugata Gupta said the new fiscal has started on a promising note for domestic and international businesses, with revenue growth visibly turning a corner.

"We expect to sustain the improving trajectory in the core domestic business on the back of consistent market share and penetration gains coupled with the ongoing initiatives to revive growth in traditional trade and expand direct reach under Project SETU," he said.

Besides, Marico will also maintain a steadfast focus on the profitable scale-up of the Foods and Digital-first brands, Gupta added.

Shares of Marico Ltd on Monday at Rs 672.40 apiece on BSE, up 1.58 per cent from the previous close.