Marico Ltd’s net profit went up 18% to touch ₹213 crore in Q4 (year-on-year basis), in line with analysts estimates. Its profit for the financial year 2019 grew to 14% to ₹930 crore.
However, marketing expenditure contracted the operating margin to 20.8%, in the quarter ended March 31 this year, as against 21.8% in Q4 in FY18. The margin, for the entire financial year 2019, also shrunk to 19.6% from 21.3% in FY18.
Brokerage firm Edelweiss Securities Ltd, expected Marico’s Q4 volume to rise 6.5% for FY19, but the company’s volume beat analyst estimates and grew 8%, the company said in a filing to the stock exchange on Monday. Volume growth looks at growth in sales minus the price hikes undertaken by the company.
The Mumbai-based company’s flagship product Parachute Rigids (hair oil) posted 6% volume growth. This growth came during the time when copra (dried coconut) prices were down 19% y-o-y basis. The company recorded 9% volume growth in the third quarter of FY19, as reported by Mint.
The declining trend of copra prices would help Marico to post higher profitability in the coming quarters. The lowering copra prices would enable it to focus more on improving growth prospects of some of the key domestic categories, said a research analyst.
The brand visibly led the growth in the category during the quarter, gaining more than 200 bps in volume market share, according to the company statement. Overall, the volume market-share of the coconut oil franchise (includes Nihar Naturals and Oil of Malabar) which went up 59.4% (March 2019 MAT).
Its portfolio of Saffola edibile oils volume grew 18% in Q4, as compared to 2% in the preceeding quarter, as reported by Mint.
The Parachute oil maker stocks fell 4.56% to close at ₹340 per share on Monday on the BSE.
