Q3 volume growth due to several proactive initiatives: Marico

Saugata Gupta, MD & CEO, Marico said the surprise on volume growth in third quarter was due to several initiatives taken over the last couple of quarters, proactive calls on pricing and long-term capability building. FMCG firm Marico on Saturday reported 23.71 percent increase in consolidated net profit at Rs 197.8 crore for the third quarter ended December 31, on account of lower expenses.  The overall volume growth stood at 10.5% with market share gains in more than 80% of its portfolioWe have achieved the desired 8-10% volume growth, said Gupta.The international business too delivered double-digit growth after a long time. Going forward he said, “It is our endeavour to get the entire foundation right in the business, so that results are sustainable.According to him raw material prices are likely to remains soft for couple more quarters, which the company would like to to pass on in terms of pricing.Below is the transcript of Saugata Gupta’s interview with Sumaira Abidi and Surabhi Upadhyay on CNBC-TV18.Sumaira: Talking about your volume growth, clearly it has surprised everyone. What went right for the company in this quarter, in terms of volume growth?A: Some of the initiatives we have been taking over the last couple of quarters and some of the brands which were having sluggish growth and along with that we had taken proactive calls on pricing given the fact that as there is a slowdown, affordability becomes an issue. And lastly, some of the long-term capability building stuff which we are doing in some of the areas of transformation we have identified, we have begun to pay some dividends. So, it is a combination of all three and we had been talking about trying to get into a 8-10 percent growth levels and that is what we have achieved.Sumaira: So, is this the kind of volume growth then which is going to be sustainable for your company going ahead?A: As I said that if the trends continue whatever trends, we would try to in our best effort basis, try to deliver 8-10 percent volume growth in the coming quarters.Surabhi: Can you update us on the performance of the international business?A: International business, after a long time, we have delivered double digit growth. Most of the countries business units have done well. We have done a complete recovery in our Middle-east business. In Egypt, although to add a lower base because of the go to market transformation disruption that happened last year in a similar quarter, Egypt is also looking to be back on track. Vietnam business again has recorded decent growth. In Bangladesh, we have taken pricing action, therefore, although the value growth is not there because of deflation, volume growth has come back. So, overall, I see a significant improvement in international business. Our endeavour is to get the entire foundation right in the business so that we can give much more predictable sustainable results.Sumaira: The drop that we have seen in raw material prices has also aided margin expansion for you this time around. So, what remains your outlook now on how raw material prices could trend going forward?A: It is difficult to give a prediction, but I believe that we continue to have a bearish scenario with the raw materials. Our endeavour is to ensure that it is significantly passed on to pricing as well as into advertising and promotion (A&P) inputs to continue to drive volume growth and market share. In the immediate one or two quarters, it seems to continue to be soft.