Marico at new high

Marico, yesterday after market hours, posted a an optimistic Q2 performance report though its evident that raw material costs are starting to impact the margins.

The desi FMCG said that it witnessed good growth during the quarter.

1: Revenue growth in the quarter was in the low twenties, with volume growth close to double-digits on a 2-year CAGR basis.

2: Parachute Coconut Oil delivered in line with medium term aspirations. Value Added Hair Oils posted double-digit volume growth.

3: Within the Saffola franchise, Saffola Edible Oils had a muted quarter, largely due to volatility in edible oil prices leading to trade destocking and partly owing to lower in-home consumption.

4: Foods, continued to grow smartly and remained on course to clock Rs.500 crore in revenues this year.

5: Premium Personal Care portfolios grew handsomely, albeit on a low base.

6: International business delivered double digit constant currency growth as company witnessed positive trends in all markets, except Vietnam. Vietnam, where a large part of its portfolio is of a discretionary nature, was in the grip of a severe COVID surge and stringent lockdown restrictions.

7. Gross margin is expected to improve marginally from the previous quarter, but will be under pressure on a year-on-year basis due to much higher input costs over the last year.

8. Operating margin is also expected to contract on a year on year basis given the arithmetic effect of significant pricing growth in the topline. As a result, the company expects modest bottom line growth in the quarter.

The market has reacted very positively to this update with the stock price hitting a new high at Rs.590 and it continues to stay strongly in the green, around Rs.483 levels.