Q3 rev growth slowed on muted rural demand, says Marico

Indian consumer products maker Marico Ltd said on Wednesday that its revenue growth slowed in the third quarter, and hit its operating profit, due to a muted recovery in rural demand amid elevated inflation.

Marico, known for its Parachute hair oil brand, estimated its consolidated revenue grew in the low single digits in the third quarter.

Three analysts on average expect the company's revenue growth to pick up to 4.7% in the October-December quarter, according to Refinitiv data, from the roughly 3% increase in the previous quarter.

"In view of the lower revenue growth, we expect a modest growth in operating profit," Marico said in a statement.

However, Marico expects gross and operating margins to improve in the quarter as key input costs and consumer prices across key franchises saw some stability.

While the urban and premium categories maintained a steady pace of growth, "recovery in rural demand was not as discernible as retail inflation stayed at elevated levels," Marico said.

Even though India's annual retail inflation eased slightly in October and November, that was mostly due to lower food prices, while core inflation remained sticky.

Sales volume of Parachute hair oil rose in the low single digits after a "visible recovery" in December, the company said. Parachute's sales fell 3% in the previous quarter.

Still, the value-added hair oils segment had a subdued quarter, it added.

Marico said its Saffola edible oil franchise grew in double digits in value terms.

The company's shares have fallen about 6% since Nov. 4 when it reported second-quarter results.