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Marico Q2 profit slides 2.8% to Rs 307 crore as inflation bites

Marico Q2 profit slides 2.8% to Rs 307 crore as inflation bites

Marico Q2 profit slides 2.8% to Rs 307 crore as inflation bites
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By Jomy Jos Pullokaran  Nov 4, 2022 5:18:44 PM IST (Updated)

Marico, which owns iconic brands like Parachute and Saffola, said in India, as retail inflation held firm, the FMCG sector witnessed a volume decline for the fourth quarter in a row, with growth led by pricing. Shares of Marico ended at Rs 535.35, down by Rs 4, or 0.74 percent on the BSE.

Homegrown FMCG major Marico on Friday, November 4, reported a 2.8 percent year-on-year (YoY) drop in net profit at Rs 307 crore for the second quarter that ended September 30, 2022.

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In the corresponding quarter last year, the company posted a net profit of Rs 316 crore. CNBC-TV18 Polls had predicted a profit of Rs 319 crore for the quarter under review.
The revenue from operations stood at Rs 2,496 crore during the period under review, up 3.2 percent against Rs 2,419 crore in the corresponding period of the preceding fiscal, with underlying volume growth of 3 percent in the domestic business and constant currency growth of 11 percent in the international business.
At the operating level, EBITDA jumped 2.4 percent to Rs 433 crore in the second quarter of this fiscal over Rs 423 crore in the corresponding period in the previous fiscal. The EBITDA margin stood at 17.4 percent in the reporting quarter compared to 17.5 percent in the corresponding period in the previous fiscal. EBITDA is earnings before interest, tax, depreciation and amortisation.
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 three-year CAGR basis, quarterly domestic volume growth stood at a healthy 7 percent.
Domestic revenues stood at Rs 1,896 crore, up 1 percent YoY, as price hikes in hair oils and premium personal care portfolios were more than offset by price cuts in Parachute coconut oil and Saffola oils.
The FMCG player that owns iconic brands like Parachute and Saffola, said in India, as retail inflation held firm, the FMCG sector witnessed a volume decline for the fourth quarter in a row, with growth led by pricing.
"Demand sentiment was largely on similar lines as the preceding quarter and improved slightly only in the last month of the quarter owing to the upcoming festive season."
Gross margin expanded 115 bps YoY, but was lower sequentially due to the consumption of higher-cost inventories of raw materials and the adverse cost impact of depreciating currencies in select international markets, it said.
The results came after the close of the market hours. Shares of Marico ended at Rs 535.35, down by Rs 4, or 0.74 percent on the BSE.
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