Mumbai: Packaged consumer goods maker Marico Ltd on Friday reported a lower-than-estimated net profit for the quarter ended 30 September, hurt by slowing consumer spending.

Consolidated net profit rose 9.89% from a year earlier to 85.87 crore in the three months. That’s lower than the 107 crore that had been forecast by analysts in a Bloomberg survey.

Marico’s consolidated net sales rose 19.48% from a year ago to 1,155.89 crore in the same period.

The maker of Saffola and Parachute oil saw its sales volume growing 14%; 5% volume growth came from the acquisition of the business of the erstwhile Paras Pharmaceuticals Ltd it acquired from Reckitt Benckiser India Ltd in the June quarter.

Slowing economic growth—which dropped to a nine-year low of 5.3% in the quarter ended March and rose slightly to 5.5% in the three months to June—has forced consumers to tighten their budgets and switch to cheaper products.

“The growth is a little slower than normal in the market," said Chaitanya Deshpande, head of corporate finance at Marico.

He attributed the drop to the impact on sales of Saffola, a premium product that saw a slowdown in sales as consumers cut back on discretionary spends. Moreover, the firm had increased the prices of saffola by 10% earlier in the year due to high commodity costs. This increased the premium between Saffola and cheaper sunflower-based cooking oils by around 70%.

“We continue to be confident of delivering long-term value to stakeholders," said Milind Sarwate, group chief financial officer.

Marico shares fell 4.47% to 204.25 on BSE on Friday, while the Sensex rose 1.04% to close at 17,197.93 points.

“The results were a little below our expectations as the revenues have come down due to Saffola and net profit has also been impacted with the higher advertisement spends and other income falling," said Anand Shah, analyst at brokerage firm Elara Capital Pvt. Ltd.

Hindustan Unilever Ltd, India’s largest listed consumer packaged goods firm by revenue, which reported its September quarter results on 26 October, also saw its volumes growth dip during the quarter to 7% compared with the 9-10% it had seen in the past few quarters.

In the September quarter, growth for Marico came from its three business units. The Indian consumer products business in India grew 19%. Marico’s international business posted a growth of 16% in value. Kaya grew 38%, driven by same store growth of 10% in India and the Middle East. Same-store sales measure growth at stores that have been open for at least a year.

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