Marico's revenue from operations grew by 31% YoY to ₹2,525 crores in Q1FY22; advertising and sales promotion sees a growth of 27% YoY
Marico sees moderated growth in rural India but it still outpaces urban
There has been a 21% constant currency growth in Marico’s International Business
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Marico's revenue from operations grew by 31% YoY to ₹2,525 crores in Q1FY22; advertising and sales promotion sees a growth of 27% YoY

There has been a 21% constant currency growth in Marico’s International Business
  • Marico’s India Business delivers a volume growth of 21%.
  • More than 90% of the company’s domestic portfolio gains market share.
In Q1FY22, Marico’s revenue from operations grew by 31% YoY to ₹2,525 crores (USD 346 million) with underlying volume growth of 21% in the domestic business and constant currency growth of 21% in the international business.

In India, the FMCG giant witnessed positivity in the demand sentiment until late April, when stricter mobility restrictions were once again imposed in various states in response to the rising severity of the second COVID wave. Unlike the first wave, the pandemic affected deeper pockets of the country, but Marico’s business was not as disrupted as in the last year given that supply chains were able to weather localized and staggered lockdowns and retail stores operated for certain number of hours during the day. Growth in key portfolios also witnessed some impact due to relatively higher salience in South and West India, which saw heavier caseloads and extended lockdown restrictions. In addition, there was also a marginal correction (2-3% impact) of the historical revenue skew from Q1 towards the previous quarter (Q4FY21). Traditional trade continued to perform well with rural and urban growing in tandem. E-Commerce maintained its accelerated growth trajectory, while Modern Trade could only recover partially as lockdown-like curbs were back into effect in various states. CSD grew on a low base.

The International business posted a strong broad-based recovery relative to the varying levels of impact in each of the markets in the base quarter. This was despite signs of moderation in demand witnessed due to the resurgence of COVID in Bangladesh and Vietnam towards the end of the quarter.

Gross margin was down 759 bps YoY given the stark contrast in the cost of inputs consumed in the two quarters, as pricing interventions in the core portfolios could only partially alleviate the inflationary pressure. However, operating leverage benefits reduced the drop in EBITDA margin to 522 bps YoY. As a result, EBITDA was up 3% YoY and recurring PAT was up 8% YoY. Reported PAT was down 7%, due to exceptional gain in the base quarter.

Other highlights relating to the quarter’s performance are as follows:

  • ∙ The core portfolios in the India business continued to log market share gains on a MAT basis, on the back of their market leadership position and strengthening equity.
  • ∙ Traditional trade continued its healthy run with both urban and rural growing by 17% in volume terms. E-Commerce grew 61%, sustaining its strong momentum. Modern Trade and CSD grew 10% and 56%, respectively. ∙ Parachute Rigids grew 12% in volumes, posting growth in both core and non-core markets. The brand continued to gain volume market share of 80 bps (MAT Jun’21).
  • ∙ Value Added Hair Oils grew 34% in volumes with each of the key brands clocking double-digit growth. The Company gained 70 bps volume market share to 37% (MAT Jun’21)
  • ∙ The Saffola franchise, comprising Refined Edible Oils and Foods, delivered 24% volume growth and 60% growth in value terms. Saffola Edible Oils delivered low double-digit volume growth despite a strong base, on the back of investment in new markets and increasing household penetration. Saffola Foods grew by more than 100% in value terms, augmented by the new launches over the last 12 months. The base Oats franchise grew by 59% in value terms backed by increased penetration and market share gains. Saffola Honey continued to grow briskly on a sequential basis, and has garnered double-digit market share in key Modern Trade chains and consolidated 25%+ market share in E-Commerce. Saffola Oodles and Saffola Mealmaker Soya Chunks have been scaling up well.
  • ∙ The Premium Personal Care (contributing less than 5% of revenues) recovered sharply on a low base but was still below pre-COVID levels, as discretionary consumption remained soft.
  • ∙ In the International business, Bangladesh clocked 9% constant currency growth. South East Asia delivered 16% constant currency growth. MENA and South Africa recovered smarty on a low base.
  • ∙ Advertising & Sales Promotion grew by 27% YoY as the Company actively invested in its core franchises and recent Foods innovations, while maintaining a low-key in discretionary categories.