Marico Q4 profit rises 7% on revenue growth but operational numbers weak

Domestic business grew by 12 percent YoY and the international business showed a 13 percent growth YoY.

"The India business volumes grew by a modest 1 percent, while the International business posted a very healthy constant currency growth of 16 percent (volume growth of 5 percent)," the company said.

Parachute and Saffola witnessed a volume decline of 5 percent YoY and 1 percent, respectively. However Value Added Hair Oils portfolio clocked 11 percent YoY volume growth.

Marico said gross margins (down 522 bps YoY) continued to remain under pressure owing to the unrelenting inflation in copra prices against a benign input cost environment in the base quarter.

Operating profit or EBITDA (earnings before interest, tax, depreciation and amortisation) declined 6.1 percent to Rs 252.3 crore and margin contracted 320 basis points to 17.1 percent compared to corresponding quarter last fiscal.

"Marico's Q4FY18 results were below our estimates on both revenue & earnings front. Though the copra prices have been cooled off by around 10 percent from the peak in January 2018, we believe its impact on price cuts would only be reflected in next two quarters. However we remain positive on the growth prospects of the company’s core hair oil / edible oil business," ICICI Securities said.

Marico share price fell 6 percent after weak operational performance. At 15:22 hours IST, the stock price was quoting at Rs 317.90, down Rs 14.95, or 4.49 percent on the BSE.