Marico to see higher sales in second half of FY24, volume growth to improve, say analysts

The brokerage added that EBITDA margin expansion in FY24 enhances comfort on the fiscal’s earning per share (EPS) estimate.

Goldman Sachs said volume growth during the quarter was impacted by one-off channel de-stocking and that the management expects acceleration. It expects deflation in overall business to fade away.

Brokerage firm Nuvama pointed out that domestic business volumes grew by 3 percent on a year-on-year basis albeit with value declining 5 percent YoY due to price interventions in key domestic portfolio last year and price cuts in Saffola edible oil.

Analysts’ remarks come against the backdrop of revenue for the quarter under review coming in flat, while profit was slightly above estimate and volume growth was 3 percent higher than the CNBC-TV18 poll projection on a year-on-year basis.

"Pricing drops in key domestic portfolios and currency headwinds in international markets subdued revenue growth," said Marico in its earnings presentation.

The firm that owns popular brands like Saffola, Parachute, and Livon among others said that during the quarter, the FMCG sector retained its positive sentiment from the preceding quarter, although clear green shoots in rural on a sequential basis, as anticipated, were not visible." Growth remained urban-led, while rural consolidated on a lower base," Marico said.

From a category standpoint, packaged foods continued its good run, while beauty and personal care largely mirrored the trajectory of rural growth, it added.

Over the outlook, Marico said though business in Q1 was marred by one-offs, it expects to resume an "improving trajectory in volume growth" in the near term, given the sustained healthy trends in offtakes, market share and penetration across our key franchises.