Marico Expects Costs Pressures To Impact Q4 Profit, Margin
Marico Ltd. expects profit to grow in low double digits during the quarter ended March amid “severe input cost pressure”, which will impact its operating margin as well.
“While the input cost environment has turned challenging in the short term, the company expects these trends to be transient and correct from Q2 of next year,” the consumer goods maker said in its quarterly business update.
The company’s India business, it said, delivered “very strong double-digit volume growth”.
Revenue growth in the fourth quarter was higher than volume growth, which Marico attributed to pricing interventions in key portfolios to partially alleviate input cost pressures.
Parachute coconut oil saw “stellar volume” growth.
Saffola edible oils grew in double digits for the sixth straight quarter despite a high base.
Value added hair oils saw high double-digit volume growth.
Foods portfolio more than doubled in size led by the company’s oats franchise and aggressive innovations through the year.
Overall premium personal care portfolio remained muted, even as select franchises continued to trend positively.
International business witnessed double-digit growth in constant currency terms amid recovery in key markets.
“Notwithstanding the quarterly variations in volume growth and margins over the last 15 months, the company maintains its aspiration of delivering sustainable and profitable volume-led growth over the medium term on the back of strengthening brand equity of its core franchises and progressively driving and scaling up new engines of growth,” the company said in a statement.
Shares of Marico ended lower for the second day in a row, falling 1.2% to Rs 402.45. Out of the 42 analysts that track the company, 31 have a ‘Buy’ rating, nine say ‘Hold’ while two recommend ‘Sell’. Based on the 12-month Bloomberg consensus data, the stock has a return potential of 12.8%.