Marico’s Q1 FY22 operating revenues up 31% YoY at Rs 2,525 crore

• India Business delivers volume growth of 21%
• More than 90% of domestic portfolio gains market share
• 21% constant currency growth in the International Business
• EBITDA margin up 319 bps sequentially
• Consolidated PAT growth of 8% on like-for-like basis

Marico has reported 31% YoY growth in its Q1 FY2022 revenues to ₹ 2,525 crore ($346 million) with underlying volume growth of 21% in the domestic business and constant currency growth of 21% in the international business.

Advertising & Sales Promotion grew by 27% YoY as the company actively invested in its core franchises and recent Foods innovations, while maintaining a low-key in discretionary categories.

Gross margin was down 759 bps YoY given the stark contrast in the cost of inputs consumed in the two quarters, as pricing interventions in the core portfolios could only partially alleviate the inflationary pressure. However, operating leverage benefits reduced the drop in EBITDA margin to 522 bps YoY, which stood at 19.0% in Q1 FY2022. As a result, EBITDA was up 3% YoY and recurring profit after tax (PAT) was up 8% YoY. Reported PAT was down 7%, due to exceptional gain in the base quarter.

In India, Marico witnessed positivity in the demand sentiment until late April, when stricter mobility restrictions were once again imposed in various states in response to the rising severity of the second COVID wave. Unlike the first wave, the pandemic affected deeper pockets of the country, but business was not as disrupted as in the last year given that supply chains were able to weather localized and staggered lockdowns and retail stores operated for certain number of hours during the day.

Traditional trade continued to perform well with rural and urban growing in tandem. E-commerce maintained its accelerated growth trajectory, while Modern Trade could only recover partially as lockdown-like curbs were back into effect in various states. CSD grew on a low base.

The International business posted a strong broad-based recovery relative to the varying levels of impact in each of the markets in the base quarter. This was despite signs of moderation in demand witnessed due to the resurgence of COVID in Bangladesh and Vietnam towards the end of the quarter.

The Company holds its medium term aspiration of delivering 13-15% revenue growth on the back of 8-10% domestic volume growth and double-digit constant currency growth in the International business. The Company will aim to maintain operating margin above the threshold of 19% over the medium term.