Marico Q1 ad spends up 14% YoY to Rs 199 crore
The company said advertising spends increased on a YoY basis as it maintained investments towards the strategic brand building of core and new franchises
FMCG company Marico's advertisement and sales promotion expenses for the quarter ended 30th June have increased by 14% to Rs 199 crore from Rs 175 crore in the same quarter last year. On a QoQ basis, the advertisement and sales promotion expenses have dropped by 2.45% from Rs 204 crore.
The company said that the advertising spends increased on a YoY basis as it maintained investments towards the strategic brand building of core and new franchises.
In Q1FY23, revenue from Operations grew by 1% YoY to Rs 2,558 crore. In India, the FMCG sector witnessed a volume decline in Q1FY23 for the third quarter in a row, and value growth continued to be price-led.
Domestic volumes declined by 6% YoY, dragged by a double-digit decline in Saffola Oils. Ex-Saffola Oils, domestic volume growth was 1%. The inherent strength of our brands, focused execution, and brand-building investments translated into 96% of the portfolio gaining market share and 93% of the portfolio sustaining penetration, both on a MAT basis.
EBITDA margin stood at 20.6%, up 159 bps YoY, and EBITDA was up 10% YoY. PAT was up 4% YoY, due to a higher effective tax rate (ETR) after the expiration of fiscal benefits in one of the manufacturing units.
Marico MD & CEO Saugata Gupta commented, “The year began on a mixed note with the domestic business contending with persistent inflation and resultant weak demand conditions, while the international businesses posted a robust all-round performance. In India, despite the strong headwinds, we have continued to record market share and penetration gains, and deliver operating margin expansion. We expect volume trends to improve once inflation pressures ease. We are confident of maintaining the strong momentum in international markets as we single-mindedly focus on strengthening the fundamentals across each of our businesses. We will continue to weather transient headwinds with resilience and prioritize sustainable and profitable growth over the medium term.”
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 an operating margin above the threshold of 19% over the medium term.
