Marico, announced mid-teen year-on-year (YoY) growth in consolidated revenue for the third quarter, reflecting robust performance driven by improving rural demand and stable urban sentiment. The company experienced sequential volume growth in its domestic business, benefitting from sustained market share gains in key product categories.
In its domestic segment, Marico’s flagship product, Parachute Coconut Oil, demonstrated resilience despite rising input costs and price adjustments. The brand achieved low teen revenue growth, primarily driven by strategic pricing interventions. However, sequential volumes moderated slightly as copra prices remained firm, prompting the company to implement another price increase toward the end of the quarter.
Saffola Oils, another key product in Marico’s portfolio, showed stability in volume despite steep price increases in response to higher vegetable oil costs. The brand achieved high teen revenue growth, highlighting strong consumer demand.
On the other hand, value-added hair oils faced challenges in the bottom-of-the-pyramid segment due to competitive pressures. However, recovery in the mid and premium segments helped mitigate these challenges, showing improvement compared to the previous quarter.
Marico’s foods and digital-first brands continued to perform ahead of expectations, maintaining strong growth. The company’s focus on expanding in these areas contributed significantly to the overall revenue growth during the quarter.
Marico’s international business also saw growth, achieving broad-based mid-teen growth in constant currency terms. Bangladesh delivered high double-digit growth, showcasing resilience and strength in its key markets.
However, Vietnam faced challenges amid a sluggish consumption environment. The MENA (Middle East and North Africa) and South African markets maintained double-digit growth momentum, reflecting strong regional performances.
Despite the revenue growth, Marico faced significant input cost pressures, with copra prices remaining higher than anticipated and vegetable oil prices rising during the quarter. However, crude oil derivatives remained stable.
As a result, Marico expects a higher-than-anticipated gross margin contraction on a YoY basis, as it continues to prioritise expanding its consumer franchise and investing in brand-building initiatives.
Operating profit growth for the quarter is expected to remain modest. Nevertheless, the company reiterated its long-term strategy of volume-led revenue growth and is committed to enhancing the brand equity of its core franchises, while scaling up new growth engines in foods and digital-first brands.
On January 06, 2025, Marico share price traded 1.86% lower at ₹648.65 at 1:30 PM (IST). Marico share price reached a 52-week high of ₹719.90 on October 03, 2024, and a 52-week low of ₹486.75 on March 19, 2024. As per BSE, the total traded volume for the stock stood at 0.76 lakh shares with a turnover of ₹4.89 crore.
At the current price, Marico shares are trading at a price-to-earnings (P/E) ratio of 62.03x, based on its trailing 12-month earnings per share (EPS) of ₹10.45, and a price-to-book (P/B) ratio of 18.77, according to exchange data.
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Published on: Jan 6, 2025, 2:02 PM IST
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