Marico reported that the demand conditions in the September quarter closely resembled the patterns seen in the previous quarter. Challenges such as increasing food prices and irregular rainfall distribution in certain areas appeared to hinder the expected improvement in rural demand.
The producer of Saffola and Parachute products reported that domestic sales volumes experienced modest year-on-year growth in the low single digits. Additionally, the company continued to observe positive trends in product demand, market share, and market penetration across its key product lines.
“Consumption trends, particularly in rural, are expected to improve in H2 owing to retail inflation levels staying within RBI’s target range, hike in MSPs, healthy sowing season, easing liquidity pressures and government spending,” Marico said in its quarterly earnings update
Regarding critical inputs, copra and edible oil prices remained within a favorable range, although the latter displayed occasional volatility. Crude derivatives remained stable, with a tendency towards upward movement. The company affirmed that there would be a substantial year-on-year increase in gross margins.
Although expenditures on advertising and promotion were notably increased to support the strategic development of both core and new product categories, the company anticipates a healthy expansion in operating profit margins, ultimately resulting in low double-digit growth in operating profit.
“We expect to maintain an improving trend across key performance parameters in H2, supported by a gradual pickup in volume and topline growth in the domestic business and healthy momentum in the international business, while the full-year margin guidance remains intact,” Marico’s update added.
