Marico Reports Higher Profit, Robust Volume Growth in First Quarter
A worker organizes bottles of Marico Ltd. coconut hair oil products at a department store in Mumbai, India (Photographer: Prashanth Vishwanathan/Bloomberg News)

Marico Reports Higher Profit, Robust Volume Growth in First Quarter

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Marico Ltd., India’s fourth largest consumer goods company by market capitalisation, posted a 17.4 percent growth in profit in the first quarter of financial year 2016-17, missing street estimates.

Net profit for the April-June period rose to Rs 264.1 crore from Rs 224.9 crore during the same period last year, it said in a filing to the exchanges. The consensus of analyst estimates tracked by Bloomberg stood at Rs 273.7 crore.

Revenue for the quarter remained flat at Rs 1,750 crore, and was lower than the Bloomberg consensus estimate of Rs 1876.2 crore

Earnings before interest, taxes, depreciation and amortisation grew 17.5 percent to Rs 374 crore from Rs 318.1 crore in the same quarter last year. The EBITDA margin expanded 310 basis points to 21.3 percent from 18.2 percent.

The company saw a robust volume growth of 8 percent for the quarter. Its Indian consumer goods business contributed 78 percent to its turnover while the International operations added the other 22 percent.

The company expects to maintain volume growth between 8-10 percent and a topline growth of 12-15 percent in the medium term, according to the press release. The near-term growth may be in single digit because of deflation in key commodities in its core markets, Marico said.

The second half of the year will witness a sweet spot between likely consumption recovery, end of deflation cycle and launch of new products in various categories leading to better volume growths.
Marico Earnings Press Release

The hair oil segment, which enjoys a 58 percent market share in India, benefited from the 41 percent year-on-year decline in prices of copra, the dried kernel of coconut used to extract oil, the press release said. Parachute, the market leader in coconut oil, saw a 7 percent volume growth this quarter for its bottled product. Saffola saw volumes grow by 11 percent.

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