Marico Q4 Results: Profit Rises 5%, Revenue Grows After Three Quarters

Marico Ltd.'s fourth-quarter profit rose in line with analysts' estimates, and revenue growth moved into positive territory after logging three straight quarters of fall as demand sentiment remained steady in line with previous months.

The net profit of the maker of Parachute hair oil rose 5% over the previous year to Rs 320 crore in the quarter ended March, according to an exchange filing on Monday. That compares with the Rs 324.8-crore consensus estimate of analysts tracked by Bloomberg.

• Revenue up 2% to Rs 2,278 crore (Bloomberg estimate: Rs 2,289.4 crore).

• Operating profit rose 12.4% to Rs 442 crore (Bloomberg estimate: Rs 444.6 crore).

• Margin widened to 19.4 % versus 17.5%, exactly in line with estimates.

• Advertising and promotion spends rose 7.6% to Rs 226 crore.

• India business revenue growth remained flat at Rs 1,680 crore.

• International business posted 6% constant currency growth, driven by MENA (19%), South Africa (13%), Bangladesh (8%) and Southeast Asia.

Marico's underlying domestic volume growth in the January-March quarter stood at 3%, as against 2% in the preceding quarter of the just ended fiscal.

"We will aim to deliver healthy revenue-led earnings growth in the near and medium term, aided by the positively evolving operating environment," said Chief Executive Officer Saugata Gupta. He expects domestic revenue growth to outpace volume growth from Q1 FY25, amid a forecast of a normal monsoon, an upward bias in copra prices and ongoing initiatives undertaken by the company to enhance general trade that have been contending with profitability headwinds.

Urban and rural consumption trends have now begun to converge. Citing Nielsen data, Marico said demand continues to be led by urban markets, while rural volumes have returned to a positive growth trajectory. Across categories, premium and urban-centric segments stayed ahead of mass segments.

The company is taking necessary steps to revive growth in the general trade channel, which will continue to be a "source of scale" and "competitive advantage" over the long term, Gupta said.

In the ongoing June quarter, Marico rolled out Project SETU, laying out a phased three-year roadmap to improve direct reach to 1.5 million outlets in FY27 from one million outlets currently. The outlay by FY27 is expected to be Rs 80–100 crore, but it will be funded through optimisation of promotional spends and indirect distribution costs in the wholesale channel.

"Therefore, Project SETU will be cost-neutral," according to Marico. In addition to improved direct reach and weighted distribution, the company expects Project SETU to drive market share gains across categories in urban and rural areas and enhance assortment levels in urban stores.

• Parachute Coconut oil, accounting for 34% of domestic revenues, registered 2% volume growth.

• Owing to the rise in copra prices, the company implemented price hikes in select packs in April 2024, resulting in a 6% increase at the brand level.

• Saffola edible oils, comprising 20% of domestic revenue, clocked mid-single-digit volume growth. Value growth declined 16%, which the company believes will abate in FY25.

• Value-added hair oils declined 7% in value terms on a high base amid persistent sluggishness at the bottom of the pyramid segment.

• The food business logged 24% value growth, closing the year at 4 times its scale in FY20. Foods are poised for a 20%-plus CAGR.

• Premium personal care sustained its healthy growth trajectory during the quarter.

• A digital-first portfolio clocked an exit annual run rate of Rs 450 crore. Beardo achieved positive Ebitda this year, while Just Herbs crossed Rs 100 crore ARR in FY24.

"We will aim to replicate the Beardo playbook as we scale the digital-first franchises and achieve a double-digit Ebitda margin in the portfolio in FY27," according to the company.

Shares of Marico rose 2.8% before the results were announced, as compared with a 0.2% decline in the broader benchmark Nifty 50.