Personal care giant Marico today announced that its profit after tax (PAT) for the January-March period increased by 4.9%. The Mumbai-headquartered company's PAT rose to Rs 320 crore during the quarter, up from Rs 350 crore in the year-ago period.
Meanwhile, operating revenue remained flat at Rs 2,278 crore, up 1.7% compared to Rs 2,240 crore in the March 2023 quarter. According to the company, sales volume in its India business increased 3% year-on-year. “Across various FMCG categories, the premium and urban-centric segments outperformed the rural and mass segments. However, we witnessed an uptick in rural sentiment towards the end of the quarter. “Among the channels, alternative channels remain prominent as general trade faces weak realizations and profitability headwinds,” the paper noted. India operations contribute approximately 74% of Marico's sales.
During the quarter, the company's gross margin expanded 420 basis points year-over-year due to lower input costs and favorable portfolio composition. Meanwhile, advertising expenses increased by 8% year-on-year. EBITDA (earnings before interest, taxes, depreciation and amortization) margin improved to 19.4%, an increase of 186 basis points compared to the same period last year.
The company said its flagship hair care brand, Parachute, recorded a 2% increase in volume, while value-added hair oils decreased 7% in value terms. Saffola edible oil recorded mid-single-digit volume growth, and the food business recorded 24% year-on-year value growth. The food division, which was launched a few years ago, has quadrupled in size compared to 2020.
In fiscal 2024, Marico reported a 13.6% increase in net income. PAT for the year was Rs 1,520 crore, up from Rs 1,322 crore in FY23. However, operating revenue was sluggish. Operating revenue for the year was 9,653 million rupees, down 1.1% from 9,764 million rupees in the previous year. As agricultural commodity prices have fallen from their peak in 2022, Marico's raw material costs have fallen significantly, boosting its annual revenue and profit margin. The cost of raw materials for FY24 was Rs 3,941 billion, 15.3% lower than the Rs 4,649 billion that had to be spent in FY23.
“We ended the 2023-24 financial year with strong results, with continuous improvement in both our domestic and international businesses, achieving our highest ever annual operating margin. (Trading company) Through continuous efforts to improve the profitability of channel partners and the innovative expansion of the direct reach area through Project SETU, the growth trajectory of mainstay categories is gradually improving, while the scale of earnings in the food and food products field is gradually improving. We are aggressively expanding as a digital-first brand,'' Marico Managing Director and CEO Saugata Gupta said in a statement. “As our Bangladesh business regains momentum, the expansion of our MENA and South African operations has visibly strengthened our international business growth structure. „We aim to achieve healthy revenue-led profit growth in the future,“ he added.