Homegrown fast moving consumer goods (FMCG) major Marico on Thursday reported 16.6 per cent year-on-year (YoY) growth in its consolidated net profit at Rs 316 crore for the first quarter of 2019-20, aided by improve in operating margin and volume growth.
"The company had reported consolidated net profit of Rs 271 crore in the corresponding period of fiscal 2018-19," Marico said in a filing to the Bombay Stock Exchange.
Consolidated revenue from operations rose by 7 per cent to Rs 2,166 crore in Q1FY20 as against Rs 2,027 crore in Q1FY19, with an underlying domestic volume growth of 6 per cent and constant currency growth of 7 per cent in the international business.
"In Q1FY20, the company delivered strong earnings growth on the back of resilient volume growth, amidst moderation in the overall demand environment in the domestic market," the company said.
The company, which sells brands like Parachute Coconut Oil and Saffola, posted 26 per cent YoY growth in earnings before interest, tax, depreciation and amortization (EBITDA) at Rs 366 crore. EBITDA margin expanded by 320 basis points at 21.3 per cent against 18.1 per cent, helped by easing raw material costs in the domestic and key overseas markets.
In Q1FY20, the company recognized an exceptional item, amounting to Rs 19 crore, as expenses towards voluntary retirement scheme offered to the employees on the close of operations at the manufacturing plant at Kanjikode (Kerala), Marico said in the exchange filing.
Depreciation increased to Rs 35 crore compared to Rs 31crore in same quarter last year, due to capitalization of capacity additions in some of the domestic manufacturing facilities during the year.
During the quarter under review, the domestic business clocked a turnover of Rs 1,731 crore, a growth of 6 per cent on a YoY basis, led entirely by volumes. The operating margin improved to 22.6 per cent (before corporate allocations) as against 19.5 per cent in Q1FY19, which was mainly attributable to a benign input cost environment, while the company ramped up investments in brand building to strengthen the core portfolio and back the multitude of new products launched in the last year.
On outlook, the FMCG firm said, "The company will continue to focus on a balanced approach towards volume growth and healthy profitability. The company would aim to maintain EBITDA margins at 20 per cent plus in the India business over the medium term."
The estimated capital expenditure in FY20 is likely to be around INR 125-150 crore, it added.
Marico shares closed 1.24 per cent lower at Rs 362.55 apiece on the Bombay Stock Exchange on Thursday.
Edited by Chitranjan Kumar