Fast-moving consumer goods (FMCG) major Marico expects its domestic business to post a modest uptick in underlying volume growth on a sequential basis during the April-June period (Q1FY25), it said on Friday in a quarterly update. The update was released after market hours. Shares of Marico closed up 1.23% on the BSE to Rs 615.30 apiece on Friday.
The modest volume growth seen in Q1 came amid adjustments in distributor stock levels to enhance the return on investment, the Mumbai-based company said. Marico also said that there was some wholesale channel destocking in Q1 to ensure smoother direct reach expansion under its Project Setu programme.
Marico expects its consolidated revenue growth in Q1 to trend upwards, touching high single digits, despite price cuts in Saffola. During the year, its consolidated revenue growth would likely inch up on the back of an improving trajectory in domestic volume growth and higher realisations due to a favourable pricing cycle in key domestic portfolios.
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The FMCG major also expects gross margins to expand on a year-on-year basis owing to a favourable portfolio mix. Among key inputs, copra prices have stayed firm, in line with forecasts, while edible oil and crude oil derivatives have remained range-bound.
“We continue to adequately invest in brand building in line with our strategic intent to continually strengthen the long-term equity of both the core and new franchises,” the company said.
In constant currency terms, Marico’s international business would likely deliver a double-digit growth, driven by resilient and broad-based growth across markets.
Going forward, Marico expects its operating profit to grow slightly ahead of revenue leading to a marginal inching up of operating margin on a year-on-year basis.
The Company also said that its recently announced collaboration with dermatological solutions provider, Kaya, for marketing its personal care products outside its clinics, would be an additional growth driver for its premium personal care business. The collaboration would accelerate Marico’s portfolio diversification agenda of its India business, it added.
From: financialexpress
Financial News
