Consumer Sentiment Improve Faster Than Expected In October-December, Says Marico
Marico Ltd. said consumer sentiment in India recovered faster than expected, aided by the festival season and a declining Covid-19 graph in the October-December quarter.
The company witnessed a strong performance across its portfolio as general trade continued to grow at a healthy pace and rural markets growth continued to outpace urban, the maker of Parachute hair oil said in its quarterly update filed with exchanges. Demand from e-commerce platforms continued its "stellar run", while consumption via modern trade—hypermarkets and supermarkets—improved.
Demand from Canteen Stores Department, India's biggest department store chain by reach, declined over a year earlier but improved sequentially.
The consumer goods maker's update underscores the recovery indicated by manufacturing activity to auto sales. The rebound is aided by resumption in economic activity and a hope of a vaccine rollout. Economists have been increasing their full-year forecasts after two straight quarters of contraction in Asia's third-largest economy.
Marico’s India business grew in double digits by volume and revenue in the quarter ended December. According to its fling:
- Parachute coconut oil delivered growth ahead of its medium-term aspiration.
- Saffola edible oils delivered double-digit volume growth.
- Value-added hair oils also witnessed a double-digit volume growth.
- Foods portfolio continued to see exponential growth.
“There was a steady revival in discretionary categories with the premium personal care portfolios witnessing improving trends sequentially," the company said. "However, still posting a modest decline on a year-on-year basis.”
Marico's international business grew in "high-single digit" by constant currency, aided by growth in Bangladesh and recovery in a few other markets.
As key raw material prices rose during the quarter, Marico cut back some promotions and increased prices of Parachute and Saffola portfolios. It expects a healthy profit growth on the back of various cost cuts.
“The company maintains an optimistic outlook for the rest of the year provided the Covid (virus) and the economic situation continues to improve,” Marico said in its update.