BackMarico Q4 profit rises 18% at ₹213 crore
Marico’s profit for financial year 2019 increases 14% at ₹930 croreIts operating margin falls to 20.8% in the March quarter
PremiumMUMBAI : Marico Ltd’s net profit grew 18% to touch ₹213 crore in Q4 (year-on-year basis), in line with analysts estimates. Its profit for the financial year 2019 grew to 14% to ₹930 crore.
However, marketing expenditure contracted the operating margin to 20.8%, in the quarter ended March 31 this year, as against 21.8% in Q4 in FY18. The margin, for the entire financial year 2019, also shrunk to 19.6% from 21.3% in FY18.
Brokerage firm Edelweiss Securities Ltd, expected Marico’s Q4 volume to rise 6.5% for FY19, but the company's volume beat analyst estimates and grew 8%, the company said in a filing to the stock exchange on Monday. Volume growth is an important indicator in a way as it looks at growth in sales minus the price hikes undertaken by the company.
The Mumbai-based company’s flagship product Parachute Rigids (hair oil) posted 6% volume growth. This growth came during the time when copra (dried coconut) prices were down 19% y-o-y basis. The company recorded 9% volume growth in the third quarter of FY19, Mint reported in February.
“The declining trend of copra prices would aid Marico to post higher profitability in the coming quarters. Further the lowering copra prices would help it to focus more on improving growth prospects of some of the key domestic categories," said Kaustubh Pawaskar, research analyst at Sharekhan-BNP Paribas.
The brand visibly led the growth in the category during the quarter, gaining more than 200 bps in volume market share, according to the company statement. Overall, the volume market-share of the coconut oil franchise (includes Nihar Naturals and Oil of Malabar) rose to 59.4% (March 2019 MAT).
Its portfolio of Saffola edibile oils volume grew 18% in Q4, as compared to 2% in the preceeding quarter, Mint reported. The volume growth comes on the back of “focused marketing initiatives" taken towards re-establishing the brand, “tactical pricing inputs", and sales through e-commerce and modern trade.
The Parachute oil maker stocks fell 4.56% to close at ₹340 per share on Monday on the BSE.
The consumer insights firm Nielsen had projected FMCG growth of 11-12% for 2019, a downward revision from its previous forecast of 13-14%.
FMCG giant Hindustan Unilever (HUL) saw its volume reach 7%, as compared to double-digit growth recorded in the previous quarters.
Similarly, Biscuit maker Britannia Industries Ltd, saw a soft fourth quarter where its volume grew 7% year-on-year. Vatika Shampoo-maker Dabur India Ltd also felt the slowdown and saw its net profit down by 6.5% from a year earlier to ₹371.5 crore.
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