FMCG company Marico August 1 reported 21.6 percent jump in its Q1FY20 consolidated net profit to Rs 315 crore against Rs 259 crore in Q1FY19.
Revenue for the quarter grew 7 percent to Rs 2,166 crore against Rs 2,027 crore.
Earnings before interest, tax, depreciation and amortization (EBITDA) was up 26 percent at Rs 461 crore against Rs 366 crore, while margin was up 320 bps at 21.3 percent against 18.1 percent.Easing raw material costs in the domestic and key overseas markets led to gross margin expansion by 524 bps on a year-on-year basis.
However, EBITDA margin expanded by 324 bps, as the Company stepped up A&P spends to support its core and new franchises.
Both EBITDA and PAT (excluding exceptional items) grew 26 percent.
In the traditional channel, growth was led by rural, while the new-age channels of modern trade and e-commerce continued their stellar run.
CSD sales grew for the third quarter in row, but should be monitored over the next few quarters for a definitive trend to emerge.
Over the medium term, the Company retains the target of 8-10 percent volume growth and healthy market share gains in the India business, the press release from Marico stated.
The company aims to build healthy foods, premium hair nourishment and male grooming into growth engines of the future and expects to deliver value growth at 20 percent plus CAGR over the medium term in these portfolios.
In the International business, the Company expects to clock organic broad-based double-digit constant currency growth over the medium term. Operating margin is expected to be maintained at 18-19 percent.
Commenting on the performance, Saugata Gupta, MD & CEO said, “The Company delivered a decent performance in a challenging demand environment for the industry at large. As we hope for a recovery in the overall sentiment towards the second half of the year, we will continue to push for volume driven growth and market share gains. After being constrained during the last two years, margins should see an uptick this year despite higher investments required to support our core franchises as well as fuel the new engines of growth.”
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