Home / Companies / News /  Marico records double-digit growth in Q3 volumes amid boosted consumer sentiment

New Delhi: Packaged consumer products company Marico Ltd on Monday said that its India business registered a “strong performance", with double digit volume growth benefiting from a faster-than-expected recovery in consumer sentiment and strong festive season sales in the third quarter ended 31 December.

In a quarterly update, the maker of Parachute hair oil and Saffola oats set the tone for the upcoming third quarter earnings that will help gauge consumer demand and normalization of supplies in the market in a year otherwise marked by covid-led disruptions. Marico is yet to report its December quarter earnings.

While Marico’s foods and cooking oils business benefited from strong in-home consumption of foods, its personal care portfolio and more discretionary premium items suffered in the months of the lockdown.

However, the three months ended December has helped the company register year-on-year growth across its portfolio.

“The quarter was characterized by a faster-than-expected recovery in consumer sentiment in India, aided by the festival season and a declining covid-19 graph. The company witnessed strong performance across its portfolio, with general trade continuing to grow healthily and rural markets staying ahead of urban. In the new age channels, while e-commerce continued the stellar run, modern trade after a soft first half, fared better in Q3. CSD (canteen store departments) continued to decline, albeit improving sequentially," the company said.

India business delivered a strong performance with double-digit volume growth. Revenue growth was in tandem with volume growth, the company said in a filing to the exchanges on Monday.

It said that its Parachute coconut oil portfolio—that forms a significant part of its domestic business—delivered ahead of its medium-term aspiration.

Saffola edible oils continued its growth momentum, delivering double-digit volume growth. Value-added hair oils, including brands such as Nihar Naturals Shanti Amla Badam, that was impacted by the lockdown in the first quarter, also exhibited strength with a broad-based sharp recovery across sub segments leading to overall double-digit growth for the category, it said. The foods portfolio, including oats, continued to witness exponential growth, backed by strong performance in both the base foods and the new product launches, it said in its update.

However, its more discretionary categories such as male grooming and premium skin care brands saw a “steady revival", with premium personal care portfolios witnessing improving trends sequentially, however, still posting a modest decline on a year-on-year basis.

In its second quarter earnings, Marico reported a 11% growth in domestic volumes, with its cooking oil and packaged foods portfolio registering double-digit growth as a result of sustained in-home consumption of food.

“With lockdown restrictions having significantly eased across the country, the company will strive to sustain the momentum and aim to deliver an 8-10% volume growth in the balance part of the year," it said in its September quarter earnings.

In the third quarter, the company took price hikes due to inflationary pressure in key raw materials. This prompted the company to cut back on some promotions and take price increases across both Parachute and Saffola edible oil portfolios.

India’s FMCG industry will record a -1 to -3% decline in 2020, market researcher Nielsen said in its forecast for the sector in November last year.

Marico, that follows a financial year, maintains an optimistic outlook for the rest of the year, provided the covid-19 situation and the economic situation continues to improve.

Its international business saw a high-single digit constant currency growth, led by double-digit constant currency growth in Bangladesh and recovery in few other markets.

ABOUT THE AUTHOR

Suneera Tandon

Suneera Tandon is a New Delhi based reporter covering consumer goods for Mint. Suneera reports on fast moving consumer goods makers, retailers as well as other consumer-facing businesses such as restaurants and malls. She is deeply interested in what consumers across urban and rural India buy, wear and eat. Suneera holds a masters degree in English Literature from the University of Delhi.
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