The national lockdown imposed in India last year caused severe supply-chain led disruption for a little over a month, but the overall sentiment saw a swift recovery through the year, Saugata Gupta, managing director and chief executive officer of FMCG major Marico said at the company's annual general meeting (AGM) on Monday.
With consumer sentiment and demand seeing a strong bounce back as the second wave recedes and vaccination picks up pace, Gupta told shareholders at the AGM that the focus for the company will focus on growing and premiumising its core portfolio and creating new engines of growth. This, the company will do through portfolio expansion in existing and new categories, and markets.
Accordingly, the company has set an aspiration to deliver 13-15 percent revenue growth over the medium term on the back of 8-10 percent domestic volume growth in the domestic business and double-digit constant currency growth in the international business. "We expect to maintain operating margin at 19 percent + over the medium term," Gupta said.
In the fiscal gone by (FY21), Marico saw its top line grow 10 percent to cross Rs 8,000 crore for the first time, while its consolidated profit after tax was up 11 percent, and operating margins coming in at 19.8 percent. This, the company said came on the back of strong traditional trade (kirana stores) led by strong rural growth. This, in a year that saw consumers across the country stocking up on essentials amid fears of COVID-19.
Gupta also added in the annual report that direct reach in rural serves as a competitive advantage for the company and it aims to expand its stockist network by another 25 percent over the next two years, "In urban, we will maintain focus on augmenting our reach in chemist and cosmetic outlets."
Marico reiterated its target of a topline of Rs 500 crore from immunity and nutrition categories this year, and Rs 850-1,000 crore by FY24, having scaled up its total addressable market (TAM) of the foods portfolio to Rs 5,000 crore.
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In the year of the pandemic, Marico leveraged rising demand for immunity-based products and forayed into these categories with products such as Saffola Honey, Saffola Chyawanamrut, Saffola Oodles, Saffola Mealmaker Soya Chunks and traditional immunity boosters under Saffola Immuniveda.
Marico will also continue its aggressive push on the digital front, going ahead with its ambition of building a portfolio of at least three digital brands with a combined turnover of Rs 450-500 crore by FY24. It plans to do this through both an organic and inorganic route.
The company has been building its digital portfolio through the launch of digital-first products like Saffola Oodles, and the acquisition of direct-to-consumer brand Just Herbs in July, in a bid to have a meaningful play in Ayurveda-led beauty categories. It also acquired another digital brand Beardo last year.
Marico's Gupta said the company's e-commerce portal (https://saffola.marico.in/) is gradually scaling up and allowing the company to reach consumers more effectively, urging shareholders too, to order from the company’s D2C website. The share of e-commerce in its domestic business grew from 5 percent in the previous year to 8 percent in FY21.
Addressing shareholders, the company’s chairman Harsh Mariwala reiterated that vaccination is the only way to defeat the virus, "At Marico, our members come first and we have successfully covered almost all of our members and their families through vaccination drives and have extended the same to our business associates and third-party service providers as well."