Leading consumer goods company Marico has reported a 14.1 percent year-on-year growth in consolidated profit at Rs 227 crore for the quarter ended March 2021, driven by volume-led strong revenue growth but lower-than-expected margin and one-time loss limited growth.
Revenue from operations shot up 34.5 percent to Rs 2,012 crore compared to the year-ago quarter, backed by robust volume growth of 25 percent in the domestic business and constant currency growth of 23 percent in the international business, the company said in its BSE filing.
Marico further said Parachute Rigids grew 29 percent in volumes, albeit on a low base, undeterred by price hikes and pullback of consumer offers to counter a part of the input cost push.
"Value-added hair oils grew 22 percent in volumes with all of the key brands clocking double-digit growth. Saffola edible oils extended stellar run with 17 percent volume growth despite a particularly strong base, on the back of investment in new markets and increasing household penetration," the company added.
Marico said the foods portfolio grew 134 percent in value terms in the quarter and crossed Rs 300 crore in turnover in FY21. "The base oats franchise grew by 84 percent in value terms, backed by increased penetration and market share gains."
The company reported an exceptional item for the quarter related to provision amounting to Rs 19 crore towards impairment of goodwill on consolidation arising out of investment in South Africa.
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At the operating level, EBITDA (earnings before interest, tax, depreciation and amortisation) grew by 13.1 percent year-on-year to Rs 319 crore but margin contracted 300 bps YoY to 15.9 percent in Q4FY21.
"Gross margin was down 517 bps owing to the severe input cost pressure, as pricing interventions in the core portfolios were not commensurate to inflation. EBITDA was up 13 percent YoY, as tight cost controls and operating leverage kicked in to reduce the impact on EBITDA margins to 300 bps," the company explained.
Advertising and sales promotion grew by 35 percent YoY as the company invested aggressively mainly in core franchises and food innovations while continuing to drive spending rationalisation and channelising investment towards growing franchises, the company said.
Numbers were mixed as profit was expected at Rs 220 crore on revenue of Rs 1,820 crore and EBITDA was estimated at Rs 320 crore with the margin at 17.5 percent, according to the an analysts' poll by CNBC-TV18.
In the international business, "Bangladesh clocked 20 percent constant currency growth. South East Asia also reverted to positive territory with 13 percent constant currency growth. MENA and South Africa also gained on a low base," said Marico.