Marico's ad spends up 10% in Q2FY23
The outlook for H2 has been 'sanguine', says the company, despite a 3% YoY reduction in PAT
Consumer products giant Marico posted its Q2FY23 financial results, stating that the outlook for H2 has been “sanguine” as domestic volume grew at 3%. In the quarter, its Revenue from Operations grew by 3% YoY to ₹2,496 crores with underlying volume growth of 3% in the domestic business and constant currency growth of 11% in the International business.
The company’s ad spend also grew 10% YoY in the quarter as the company invested towards strategic brand building of core and new franchises. EBITDA margin was at 17.3% and EBITDA rose 2% YoY. PAT decline 3% YoY due to the losses incurred during foreign currency translation and higher effective tax rate.
Marico’s India Business delivered a turnover of ₹ 1,896 crore, up 1% on a YoY basis. The International business delivered a turnover of ₹ 600 crore with 11% constant currency (cc) growth.
The international business sustained its double-digital constant currency growth momentum for the seventh quarter in a row, according to the company.
“Each of the markets exhibited strength amidst macroeconomic uncertainty and currency devaluation headwinds in some markets,” said the company.
The FMCG sector in India witnessed a volume decline for the fourth quarter in a row with growth led by pricing due to retail inflation. The company stated that the demand sentiment was largely on similar lines as the preceding quarter, seeing slight improvement in the last month of the quarter.
“After a tepid Q1, the Company recovered to post reasonable growth in domestic volumes on the back of healthier traction among urban and premium discretionary portfolios. On a 3-year CAGR basis, quarterly domestic volume growth stood at a healthy 7%. More than 90% of the portfolio consolidated market shares. Among the sales channels, General Trade remained weak, while the divergence in rural and urban growth grew starker with the former reeling under persistent inflationary and liquidity pressures. MT and E-commerce grew in double digits,” said Marico.
Saugata Gupta, MD & CEO, commented, “The first half ended on a fairly positive note despite the operating environment bringing little cheer. We are hopeful of a much better performance in the core domestic portfolio in the second half of the year as macro indicators and the base turn more accommodative, while the new engines continue to deliver on their promise. We are confident of sustaining the strong and profitable growth trajectory in the international markets and staying resilient amidst uncertainty in some of the markets. We believe consistent investment in our brands and focus on execution will enable us to deliver competitive volume-led growth and maintain healthy profitability over the near and medium term.”
