Marico posted a net profit of Rs309cr, which rose 17.05% in the quarter ended September 2021 as against Rs264cr during the previous quarter ended September 2020. Sales rose 21.62% to Rs2419cr in the quarter ended September 2021 as against Rs1989cr during the previous quarter ended September 2020.
In Q2FY22, Revenue from Operations grew by 22% YoY to Rs2,419cr (USD 327 million) with underlying volume growth of 8% in the domestic business and constant currency growth of 13% in the international business.
The stock ended at Rs570 up by Rs6.05 or 1.07% from its previous closing of Rs563.95 on the BSE.
In the International business, we witnessed a steady quarter in all markets, except Vietnam, which was contending with a severe COVID surge during the quarter.
Gross margin improved sequentially by ~140 bps, but was down ~560 bps YoY as edible oil and crude oil prices remained at elevated levels. EBITDA margin stood at 17.5%, down 210 bps YoY. EBITDA was up 9% YoY and recurring PAT was up 8% YoY. Reported PAT was up 17%, due to an exceptional item in the base quarter.
India domestic business delivered a turnover of Rs1,870cr (USD 253 million), up 24% on a YoY basis. The underlying volume growth was 8%. The operating margin was lower YoY at 17.8% in Q2FY22 vs 20.6% in Q2FY21, owing to sharp input cost pressure which was only partly alleviated by pricing interventions in key portfolios and ongoing cost rationalization measures.
Other highlights relating to the quarter’s performance are as follows: • We gained market share in more than 90% of the portfolio in the India business on MAT basis.
• Parachute Rigids grew 7% in volumes, backed by increasing penetration in both core and non-core markets. Extending its market leadership, volume market share of the brand rose by 180 bps in rigid packs (MAT Sep’21).
• Value Added Hair Oils delivered value growth of 16%, largely driven by volumes. Mid and premium segment brands gained salience during the quarter. The Company gained 40 bps in volume market share (MAT Sep’21).
• The Saffola franchise, comprising Refined Edible Oils and Foods, grew 46% in value terms. Saffola Edible Oils had a muted quarter, largely due to volatility in edible oil prices (leading to trade destocking during the quarter) and partly owing to lower in-home consumption. Saffola Foods grew by ~70% in value terms, with both core and new franchises pitching in. The base Oats franchise grew by 36% in value terms backed by increased penetration and market share gains. Saffola Honey is tracking in line with internal targets and should reach an exit run rate of Rs100 Crore this year. Saffola Oodles and Saffola Mealmaker Soya Chunks also continued to scale up well. The new Saffola Chyawanprash, launched under the Immuniveda range, comes with a renewed mix based on the learnings from the earlier avatar.
• Both franchises of the Premium Personal Care (contributing less than 5% of revenues) witnessed improving traction and posted double-digit growth. Livon Serums moved ahead of pre-COVID run rates, while Male Grooming is still to attain the pre-COVID run rates. Beardo and Just Herbs scaled up in line with expectations.
• In the International business, Bangladesh clocked 16% constant currency growth. South East Asia was down 2% in constant currency terms, due to the severe COVID surge and strict lockdowns enforced in the region. MENA and South Africa grew 20% and 8% in constant currency terms.
• Advertising & Sales Promotion spends was at 8.0% of sales, as the Company maintained its investments in core franchises and recent Foods innovations. Ad spends will rise in the forthcoming quarters.
