Marico Q2 results: Net profit rises 17% to Rs 360 cr, revenue falls marginally

Homegrown fast moving consumer goods (FMCG) firm Marico Ltd on Monday reported an one per cent decline in its operating revenue for the July-September quarter. The company, which owns some of the popular FMCG brands like Saffola and Parachute, raked in Rs 2,476 crore in Q2FY24, lower than Rs 2,496-crore revenue from operations it had posted in Q2FY23.

Its net profit, however, surged 17 per cent to Rs 360 crore in September quarter - up from Rs 307 crore in the corresponding quarter previous year - aided by easing raw material prices. Prices of key raw materials had peaked in mid-2023 and have since come down. For Marico, cost of materials consumed declined 11.2 per cent to Rs 1,1,06 crore in Q2FY24 from the year-ago period. This helped its profitability, despite faltering sales.

According to the company, its volume offtake during the quarter surged 3 per cent year-on-year, which was in line with its volume growth in the previous quarter (Q1FY24). During the quarter, demand trends in the domestic FMCG sector stayed largely in line with the preceding quarter. While urban sentiment improved sequentially, instances of higher food inflation and uneven rainfall distribution led to a slower-than-expected pace of recovery in rural demand. "Packaged foods, given its high urban salience, maintained a healthy growth trajectory and continued to outpace mass home and personal care categories. With commodity inflation largely in check and price cuts implemented across categories, we remain optimistic about a gradual recovery in sectoral volume growth, aided by range-bound retail inflation, onset of the festive season and continued government spending," Marico said in a statement.

“The domestic and overseas businesses have delivered a fairly resilient performance amidst a challenging operating environment in the first half of the fiscal. We have made substantial progress towards achieving the diversification objective set for the year with Foods and Digital-First portfolios scaling up on expected lines. We are also on-course to deliver robust gross and operating margin expansion this year, even while ramping up brand building investments to strengthen the equity of our franchises. We continue to hold the aspiration of exhibiting an improvement across key performance parameters on a full year basis,” said Saugata Gupta, Managing Director & CEO, Marico Ltd.

Amid a slow demand scenario, Marico increased its spending on the advertisement and promotional front by 26 per cent y-o-y to Rs 268 crore. However, the company’s top-line suffered due to poor show on the edible oil segment. Led by its flagship brand Saffola, the edible oil segment reported a 12 per cent decline in sales as edible oil prices fell from its peak last year. While Parachute coconut oil, which contributes nearly 31 per cent towards its domestic sales, declined 1 per cent in sales.

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