The revenue increased on the back of a strong domestic volume growth of 15% and a constant currency growth of 8% in the international business. Profit before tax rose 10% year on year to Rs 394 crore in Q3 FY21. Tax expense for the quarter ended December 2020 remained unchanged at Rs 82 crore. EBITDA grew by 11% to Rs 413 crore in Q3 FY21 over Q3 FY20. Meticulously driven cost saving initiatives and rationalised advertising spends in discretionary categories resulted in the Company delivering an EBITDA margin of 19.5%, a moderate dip of 90 bps year-on-year. Advertising & sales promotion at 9% of sales, grew by 4% YoY after driving significant spend efficiencies and rationalizing spends in discretionary categories. Spends were focused largely on core franchises and new products. The domestic business delivered a turnover of Rs 1,627 crore, up 18% on a YoY basis, on the back of a strong underlying volume growth of 15%. The operating margin was lower YoY at 21.6% in Q3FY21 versus 23.2% in Q3FY20, owing to the residual impact of inflationary input costs after the company increased effective consumer prices in select portfolios, rationalized advertising spends in discretionary categories and realized accruals of annualized targeted cost saving initiatives of Rs 150 crore in the current year. During the quarter, as key raw materials witnessed inflationary trends, the company increased effective consumer pricing in select portfolios, while continuing to absorb the cost pressure to a certain extent. Parachute Rigids recorded a volume growth of 8% during the quarter, affirming its position as a trusted leader brand. Value Added Hair Oils had a strong quarter, clocking a healthy broad-based volume growth of 21%. Marico's International business grew by 8% in Q3FY21 in constant currency terms. The operating margin in the international business marginally expanded to 21.3% in Q3FY21 versus 20.5% in Q3FY20, given tighter overhead cost management across all geographies. The business in Bangladesh sustained its growth momentum, registering a 15% YoY constant currency growth in Q3FY21. The South East Asia business was down 3% in Q3FY21 in constant currency terms. The MENA business recorded a soft1% de-growth in constant currency terms. The South Africa business continued to grow, clocking a 7% constant currency growth for the quarter. Marico holds its medium term aspiration of delivering 8-10% domestic volume growth and 13-15% revenue growth. The near term outlook appears more promising, as the company expects domestic volume growth to be in double digits, provided there is no second surge of COVID-19 cases and economic recovery continues. Marico shall continue to invest behind brand building to support market growth initiatives in core categories and expansion into adjacent categories as advertising spends are expected to reach pre-COVID levels. Spends on the digital platforms will continue to rise. The company would be comfortable maintaining its threshold operating margin of 19% plus over the medium term. Marico is a leading Indian group in consumer products in the global beauty and wellness space. Powered by Capital Market - Live News |