Top Story

Home >> Marketing >> Article

Marico Limited - Q3 FY18 Results.

Font Size   16
Marico Limited - Q3 FY18 Results.

In the quarter ended December 31, 2017, Revenue from Operations was at INR 1,624 crore, a growth of 15% YoY. EBITDA was at INR 302 crore, up 11% YoY and PAT at INR 221 crore, up 17% YoY.

The India business posted a healthy volume growth of 9.4% and a resilient margin performance. In an uncertain business environment, continued off-take growth coupled with market share gains affirmed the underlying strength of the franchise. Since copra prices are expected to remain firm in the near term, the company has taken Parachute Rigids’ prices up by approximately 11%, effective January 2018.

The Union Budget 2018-19 is expected to improve the livelihood and disposable income in the hands of masses, especially in rural India. Green shoots in rural were visible through Q2 and Q3 this year. The Government's focus on agriculture, education, infrastructure, employment generation and healthcare should result in the continuance of this trend over the medium term.

For Q4 FY18 and beyond, the Company retains the target of 8-10% volume growth and healthy market share gains on the back of increased investment in the core portfolio, aggressive new product launches, distribution expansion, judicious pricing and tighter cost management. The International business grew by 9% in constant currency terms.

At its meeting held on February 09, 2018, the Board of Directors of the Company has declared an interim dividend of 250% (INR 2.5 per share) on its paid up equity share capital of INR 129.08 crores, up from 200% last year.

Other Updates:

The Company cut retail prices in the Premium Hair Nourishment (Livon Serums and Livon Hair Gain Tonic), Male Grooming (Set Wet Hair Gels, Set Wet Deodorants and Parachute Advanced Men Hair Creams) and Skin Care portfolios commensurate to the changes in GST rates, announced in November 2017, to pass on the benefits to consumers.

Marico was ranked among 100 Best companies for women in India as per a study jointly conducted by Working Mother, the celebrated gender-parity champion in the United States and AVTAR, the pioneers of Diversity & Inclusion in India.

Marico was ranked as #8th Best Workplace in Manufacturing in India in a study conducted by Great Place to Work Institute, 2018.

The India business reported a turnover of INR 1,285 crore (USD 198 million), a growth of 19% over the same period last year. The operating margin during Q3 FY18 was 22.2% before corporate allocations as against 24.3% for the same period last year. A&P spends in the India business was higher by 14% in Q3 FY18 on a comparable basis.

Parachute Rigids portfolio (packs in blue bottles) posted a strong volume growth of 15% in Q3 FY18 achieved due to a combination of competitive pricing and initial signs of shift of business from unorganised to organised players due to GST implementation. The Coconut Oil franchise outperformed the category growth, evident from market share gains of 144 bps to ~59%, during the 12 months ended December 2017.

The Saffola Refined Edible Oils franchise recorded a flat quarter in volume terms. The increased price premiums of Saffola Edible Oils over competing single seed edible oils resulted in the temporary blip during the quarter. Despite a flat growth, the brand maintained its leadership position in the super premium refined edible oils segment with a 68% volume market share on an exit basis.
The growing consumer trend towards healthier culinary choices and the strong brand equity continue to lend confidence in the medium term potential of the franchise.

The Healthy Foods franchise grew by 24% in value terms. Saffola Masala Oats (SMO) maintained its momentum, on the back of focused inputs and a renewed promotional campaign, which led to a consolidation in its value share to 70%
(Dec 2017 MAT) in the flavoured oats category.

During the quarter, we further extended Saffola’s footprint in the space of Weight management & Fitness with the launch of a range of Saffola Active Soups in November 2017, which is currently being prototyped in Mumbai. These are available in 5 flavours - Tangy Tomato, Creamy Sweet Corn, Fiery Hot & Sour, Garden Vegetables and Simmering Manchow in 2 formats – a Single-serve instant soup sachet at INR 10, as well as multi-serve ready-to-cook packs at INR 55.

The Value-added Hair Oils franchise registered a volume growth of 8% during the quarter. A slowdown in CSD sales was a drag on the performance. Volume growth ex-CSD was at 11%. Despite this headwind, the Company further strengthened its market leadership by 104 bps to a volume share of ~34% and with a value share gain of 109 bps to ~26% (MAT December 2017). Nihar Naturals Shanti Amla Badam grew impressively and maintained its market leadership in volume terms within the Amla hair oil category.

Premium Hair Nourishment and Male Grooming portfolios staged a recovery after having declined in the last 4 quarters.

Male Grooming portfolio grew by 36% in value terms on a comparable basis, led by a sharp recover iin Set Wet Hair Gels. The value market share of Set Wet Hair Gels currently stands at 58%, constituting circa 55-60% of total Male Grooming Portfolio.

Marico’s International Business achieved a turnover of INR 340 Crore (USD 52 million) in Q3 FY18 with an underlying constant currency growth of 9%. The operating margins (before corporate allocations) are at 14.9% in Q3 FY18 as against 16.1% for the same period last year.

Bangladesh continued its good run with a double digit constant currency growth and recovery in the Middle East resumed, while the temporary slowdown in Vietnam was a drag on the performance.

Commenting on the Q3 FY18 performance, Saugata Gupta, MD & CEO said, “We had a stable quarter marked by healthy growth in most franchises with a sustained momentum in off-take growth and market share gains. We are witnessing early signs of revival in consumer sentiment, especially in rural. The Government thrust on rural growth can be expected to fuel this trend further. We will continue to focus on execution and strengthening our brands in our endeavor to deliver sustainable profitable growth over the medium to long term.”

Tags e4m

The new Head of Office for FCB Ulka Bengaluru on her vision for the agency, her role in shaping brands over 16 years, and why it is important to have fun in advertising

Strategy Head, Zirca Digital Solutions listed out key aspects of a good content marketing strategy and performance indicators for successful campaign

Richard Ingleton, Group CEO, Kantar Insights, says it is not right to associate market research with just survey

Vaishali Verma of Initiative, part of the Interpublic Group’s media management network IPG Mediabrands, spoke about her transition to CEO, and her vision for the agency

Flipkart entered the same category after a brief hiatus in the fifth spot

Sunil Lulla, Group CEO, Balaji Telefilms Ltd. spoke about the transition of branded content, the key performance indicators for a content marketing campaign and more

A look at Prime Minister Narendra Modi’s journey from common man to being India's most powerful man