- 06 May 2022
- ICICIdirect Research
Marico posts Q4FY22 numbersMARICO - 550 Change: 7.05 (1.30 %)
News: Marico reported 7.4% revenue growth to Rs2161 crore (I-direct estimate: Rs2193.8 crore) led by 5.1% growth in India business & 16.4% growth in International business. Domestic volume growth was 1% during the quarter. On a full year basis, volume growth was 7%. Gross margins were up by 33 bps. Marketing & Overhead spends increased by 84 bps & 36 bps respectively. Operating profit 8.5% to Rs346 crore with 16 bps improvement in operating margins. However, operating margins are much lower than its historical averages. Net profit saw a growth of 13.2% to Rs 256.9 crore.
Views: Marico was impacted by high copra prices in FY21 & H1FY22. With the decline in copra prices in last two quarters, it was expected that gross margins would improve considerably & come back to the normal range of 18-19%. However incessant inflation in edible oil & crude derivative prices has adversely impacted gross margins & subsequent expected improvement in operating margins trajectory. Similar to all other FMCG companies, Volume growth was dismal due to adverse consumer sentiments specifically in rural & semi-urban regions. Sharp rise in edible oils is leading to down-trading towards economy brands. The only growth category for the company remains foods business, which has grown at 17% despite high base. The company has achieved its Rs450 crore + sales target for the foods business in FY22. Going forward, we remain cautious on volume growth trajectory as well as recovery in operating margins to the normalise levels. We will be coming up with detailed update after the conference call.