Marico Ltd. has announced its financial result for Q1FY25. The report shows that revenue from operations stood at ₹2,643 crore, marking a 7% year-on-year increase. The domestic business experienced underlying volume growth of 4%, while the international business achieved a constant currency growth of 10%.
During the quarter, the overall FMCG volume trends in India continued to show gradual improvement on a 2-year CAGR basis. The trajectory in rural areas showed more promise, while urban areas remained stable. Both HPC (Home and Personal Care) and Food segments witnessed an uptick, with the former experiencing a more pronounced pickup over the last six months. Premium segments outpaced mass segments, and alternate channels gained significance compared to General Trade (GT).
The volume growth was supplemented by price hikes in the Coconut Oil portfolio, which more than offset the residual base impact of pricing cuts in the Saffola Oil portfolio. Key portfolios saw healthy off-takes, with more than 90% of the business either gaining or sustaining market share and penetration on a MAT basis.
The execution of Phase 1 of Project SETU in six states, representing a mix of stronghold and opportunity markets, has yielded promising initial results. This phase has led to direct coverage expansion in both urban and rural markets. In FY25, the company plans to scale up Phase 1 markets and expand into more states.
The international business sustained its double-digit constant currency growth momentum, with each key market delivering broad-based growth.
Gross margin expanded by 230 basis points year-on-year. Advertising and promotion spending increased by 13% YoY. The EBITDA margin stood at 23.7%, up 50 basis points YoY, with EBITDA grew by 9%. Profit after tax (excluding one-offs) increased by 12% due to a lower effective tax rate (ETR) during the quarter. This excludes the one-off gain on the sale of fixed assets, classified under ‘Other Income,’ in the base quarter. Reported PAT growth was 9%. The ETR is expected to be 22.5% in FY25
Category Growth
Parachute Rigids registered a 2% volume growth. Volume off-takes grew 8% during the quarter. The brand asserted its stronghold in the category with ~100 bps gain in market share during the quarter. The volume market share of the composite Coconut oil portfolio reached higher levels at ~64% on a MAT basis.
Value-Added Hair Oils declined 5% in value terms amidst persistent sluggishness and competitive headwinds in the bottom of the pyramid segment. Mid and premium segments of franchises continued to fare relatively better. The value market share of the franchise was up ~60 bps during the quarter and consolidated at 27% on a MAT basis.
Saffola Edible Oils delivered mid-single-digit volume growth as input and consumer pricing remained stable.
Foods posted robust 37% value growth YoY. Saffola Oats delivered 20%+ growth, while the relatively newer franchises also scaled up on expected lines. True Elements and Plix maintained their accelerated growth momentum.
Premium Personal Care sustained its strong growth trajectory during the quarter, led by the Digital-first portfolio. Beardo continued to scale well and is on course to deliver improved profitability in line with expectations. Just Herbs and Personal Care portfolio of Plix continued to gain traction.
Earlier this month, the Company announced that it will collaborate with renowned dermatological solutions provider, Kaya Limited, to advance in the personal care segment. Under this arrangement, the Company will have exclusive rights to scale up Kaya’s range of efficacy-based personal care products outside of its clinics. This strategic initiative presents a Rs 100 crore revenue opportunity over the next 4-5 years and will add another growth lever to Marico’s Premium Personal Care led Digital Business.
In international business, Bangladesh achieved 10% constant currency growth, maintaining resilience and momentum. South-East Asia was flat in constant currency terms, as the recovery in HPC demand in Vietnam was offset by a weaker quarter in Myanmar. MENA delivered 20% constant currency growth, with both the Gulf region and Egypt performing well. South Africa saw a 28% constant currency growth, driven by the ethnic hair care segment. NCD and Exports reported 14% growth.
Saugata Gupta, MD & CEO, said, “The new fiscal has started on a promising note for both the domestic and international businesses with revenue growth visibly turning a corner. We expect to sustain the improving trajectory in the core domestic business on the back of consistent market share and penetration gains coupled with the ongoing initiatives to revive growth in traditional trade and expand direct reach under Project SETU. We will also maintain a steadfast focus on the profitable scale-up of the Foods and Digital-first brands. The international business has been veritably consistent over the last few years and is expected to maintain its double-digit constant currency growth momentum. We will aim to deliver on each of the key performance parameters and drive healthy revenue-led earnings growth in the near and medium term.’’
