FMCG firm Marico Ltd on Wednesday reported 7.90 percent increase in its consolidated net profit at Rs 273 crore for the second quarter ended September 30, helped by robust volume growth in domestic business and a stable performance overseas.
The company had posted a net profit of Rs 253 crore in the July-September quarter a year ago, Marico said in a regulatory filing.
Its revenue from operations was up 8.74 percent to Rs 1,989 crore during the quarter under review, as against Rs 1,829 crore in the year-ago period.
Commenting on the results, Marico MD & CEO Saugata Gupta said: "The sector has witnessed some green shoots of revival in consumer sentiment with the gradual easing of lockdown restrictions imposed to curb the ongoing COVID-19 pandemic."
Moreover, the inherent strength of our trusted franchises and deep distribution network has allowed the Company to deliver a strong Q2 with broad-based double-digit volume growth in the domestic business and a stable performance overseas, he said.
Marico’s total expenses were at Rs 1,641 crore in Q2/FY 2020-21, as against Rs 1,524 crore, up 7.67 percent.
During the period, domestic sales were up 7.86 percent at Rs 1,508 crore, as against Rs 1,398 crore a year ago.
"The operating margin was slightly lower year-on-year at 20.7 percent in Q2FY21 vs 21.0 percent in Q2FY21, as the Company optimised brand building spends in non-core portfolios and drove a variety of cost-saving initiatives to help tide over input cost headwinds,” Marico said in a post earnings statement.
The company further noted that traditional channels continued to outperform with rural growing ahead of urban, while in the new-age channels, strong acceleration continued in E-Commerce.
Revenue from the international business was up 11.60 percent to Rs 481 crore in the period under review, as against Rs 431 crore a year earlier.
"Marico’s International business grew by 7 percent in Q2FY21 in constant currency terms. The operating margin in the international business expanded to 23.1 percent in Q2FY21 vs 21.5 percent in Q2FY20, given aggressive cost management across all geographies,” it said.
Markets such as Bangladesh grew by 16 percent in constant currency terms.
"South-East Asia (26 percent of the International Business) de-grew by 4 percent in constant currency terms, with Vietnam posting a decline of 6 percent in constant currency terms as the Home and Personal Care segment slowed down,” it said.
While, South Africa had a good quarter on the back of buoyancy in the health care portfolio and other territories recovered sequentially but posted modest declines on a year-on-year basis.
During the H1 period (April-September) Marico’s sales on a consolidated basis was down 2.02 percent to Rs 3,914 crore as against Rs 3,995 crore of the corresponding period of the previous fiscal.
"The Hygiene segment has contributed about 1.5 percent to the turnover in H1, while the Company has witnessed some cooling off in the accelerated demand in this category immediately following the onset of the pandemic,” it said.
Meanwhile, in a separate filing Marico informed its board in a meeting held on Wednesday has approved an interim equity dividend of 300 percent, which is Rs 3 per equity share of Re 1 each for FY 2020-21.
Shares of Marico Ltd settled at Rs 364.70, up 2.21 percent from its previous close on BSE.