Moneycontrol Bureau
FMCG major Marico's fourth quarter consolidated net profit grew by 24 percent to Rs 110 crore compared to Rs 88.8 crore in the corresponding quarter of last fiscal. Profit and revenue met street expectations but operational performance missed estimates.
Total income from operations climbed 14.4 percent to Rs 1,226 crore during January-March quarter against Rs 1,072 crore in the year-ago period, aided by price hikes.
"The overall sales value growth was bolstered by the price increases taken across the portfolio to cover a major part of the input cost push," the company reasoned.
It delivered a secondary volume growth of 7 percent in Q4FY15 but due to destocking, the primary sales volume growth was muted at 3 percent.
While explaining the reason for muted volume growth, it said "In Q4FY15, the India business progressed well in the execution of the project on automated sales order management and distributor replenishment system and as a part of this implementation the distributor level inventory was reduced."
Consolidated operating profit rose by 11.3 percent year-on-year to Rs 171 crore but margin declined 40 basis points to 14 percent in the quarter gone by. Analysts had expected operating profit of Rs 182 crore and margin at 14.4 percent.
Marico said its FMCG Business in India achieved a turnover of Rs 949 crore during the quarter and Rs 4,449 crore during the year, a growth of 17 percent and 26 percent over the same period last year.
The company believes that an operating margin in the band of 17 percent to 18 percent is sustainable for the domestic business in the medium term. Operating margin of India business during Q4FY15 and FY15 was 18 percent and 17.7 percent, respectively before corporate allocation.
According to the company, the average market price of copra (raw material) during Q4FY15 and FY15 was up by 16 percent and 60 percent compared to the respective periods last year.
At the beginning of the quarter, the company was expecting a cooling off in the copra prices starting March 15. However, the market trends suggest that the current prices are likely to remain rangebound in the near future.
International business reported a 6 percent growth in revenue at Rs 277 crore in Q4 and constant currency growth of 8 percent. Operating profit margin for the quarter was lower as compared to last year on account of increased investment in brand building in Middle East, Vietnam and Myanmar.
Marico believes expansion in adjacent markets such as Nepal, Pakistan, Cambodia, Myanmar, Sri Lanka, East Africa etc, is expected to contribute up to Rs 100 crore by next year.
The scrip of Marico closed at Rs 401.35, up Rs 1.25, or 0.31 percent on the BSE.
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