MUMBAI : Homegrown FMCG major Marico on Thursday reported 11% year-on-year (y-o-y) growth in its consolidated net profit at Rs272 crore for the third quarter ended December 31, 2019, aided by growth in international business.
The company had reported consolidated net profit of Rs246 crore in the corresponding period of fiscal 2018-19, Marico said in a filing to the BSE. Profit was higher than Rs260.8 crore estimated by Bloomberg poll of 25 analysts.
International business grew 7.77% to Rs444 crore for the quarter ended December 31 2019 against Rs412 crore for the same quarter last year led by strengthening momentum in Bangladesh and healthy growth in exports to diaspora and other markets.
Consolidated revenue from operations fell marginally to Rs1,824 crore in Q3 FY20 as against Rs1,861 crore in Q3 FY19, with an underlying overall volume growth of 2% and International constant currency growth of 10% in the international business.
On a standalone basis, net profit grew 3.07% to Rs269 crore for the quarter ended 31 December 2019 against Rs261 crore for the same quarter last year. Revenues fell 4.40% to Rs1,434 crore versus Rs1,500 crore for the corresponding quarter of previous year.
The company, which sells brands like Parachute Coconut Oil and Saffola, reported 4% y-o-y growth in earnings before interest, tax, depreciation and amortisation (EBITDA) at Rs373 crore. EBITDA margin expanded by 116 basis points to 20.4% during Q3 FY20.
Advertising and sales promotion expenses stood at 10.14% of sales, up 12.12% on a year-on-year basis, Marico said in the exchange filing.
The domestic business clocked a turnover of ₹1380 crore, down 4.76% on a y-o-y basis in the backdrop of an accelerated slowdown in consumption during the quarter. The operating margin (before corporate allocations) improved 21.59% in Q3 FY20 as against 19.88% in Q3 FY19. This was mainly attributable to a benign input cost environment, though the company continued to up the investment in brand building to strengthen the core portfolio and support the multitude of new products launched over the last 18 months, it said.
Depreciation increased to Rs32 crore compared to Rs31 crore in same quarter last year, due to capitalisation of capacity additions in some of the domestic manufacturing facilities during the year.
On outlook, the FMCG firm said, “We will continue to invest behind brand building to support market growth initiatives in core categories and expansion into adjacent categories. A&P spends are expected to be circa 9% of sales on an annualized basis. The company will continue to drive cost excellence across the organization to extract savings that will be redeployed towards igniting profitable growth and pricing. operating margin is expected to be maintained at 18-19% over the medium term.”
The company has also declared interim equity dividend of Rs3.25 per equity share of Rs1 each, 325% on the paid up equity share capital of Rs129.09 crore, for FY 2019-20.