Marico Q2 Results: Net profit rises 17% to Rs 360 crore, revenue from operations dip slightly

In the domestic market, Marico's revenue decreased by 3.37% to Rs 1,832 crore in the September quarter, compared to Rs 1,896 crore in the same period last fiscal. Demand trends in the domestic FMCG sector were in line with the preceding quarter, with a slower-than-expected recovery in rural demand due to factors like food inflation and uneven rainfall distribution.

While Parachute Rigids and Saffola Edible Oils showed modest volume growth, value-added hair oils grew by 1% in value terms. Marico Packaged Foods continued to experience healthy growth, outpacing other personal care categories.

However, Marico Packaged Foods, given its high urban salience, maintained a healthy growth trajectory and continued to outpace mass home and personal care categories. "Foods continued its steady growth trajectory with 25% value growth YoY. The franchise is largely on course to reach its FY24 revenue aspirations," it said.

Similarly, its personal care business delivered a "steady performance" and Marico’s digital-first portfolio clocked an ARR (Annual recurring revenue) of over Rs 350 crore in Q2. "The share of Foods and Premium Personal Care was at about 20% of domestic revenues in Q2," it said.

However, revenue from international went up 7.33% to Rs 644 crore. "Bangladesh clocked 2% constant currency growth amidst ongoing macroeconomic headwinds. Vietnam grew 13% in CCG terms with a steady performance in both the HPC and Foods portfolios. MENA (Middle East and North Africa) delivered 34% CCG and South Africa posted 23% CCG," it said.

On the result, MD & CEO Saugata Gupta said the domestic and overseas businesses have delivered a fairly resilient performance amidst a challenging operating environment in the first half of the fiscal. "We have made substantial progress towards achieving the diversification objective set for the year with Foods and Digital-First portfolios scaling up on expected lines. We are also on course to deliver robust gross and operating margin expansion this year," he said.

Over the outlook, Marico said in the domestic market commodity inflation is largely in check and price cuts are implemented across categories. "We remain optimistic about a gradual recovery in sectoral volume growth, aided by range-bound retail inflation, the onset of the festive season and continued government spending," it said.

On a consolidated basis, Marico expects revenue growth to move into positive territory in the second half of the year. "Gross margin is expected to expand by 350-400 bps, which is higher than earlier envisaged, in view of the H1 performance and continued input cost tailwinds. We will also sustain aggressive brand-building investments towards strengthening the equity of the core and new franchises to drive growth. Consequently, we expect operating margin to expand by 200 bps in FY24," it said.

Shares of Marico Ltd on Monday settled at Rs 534.50 apiece on BSE, down 0.62% from the previous close.