Personal care products maker Marico Ltd’s Oct-Dec net profit rose 22 per cent helped by higher volumes and softer input costs. The company reported a consolidated net profit of 621.9 million rupees on sales of 6.7 billion rupees in Oct-Dec on Thursday.
This compares with a profit of Rs.508.9 million on net sales of Rs.6.2 billion a year ago. Marico’s sales growth lagged the growth in profits as it had cut prices of some products in the first half of the fiscal, impacting its value growth.
Volume growth was much higher at 14 percent and this, combined with its increased size of operations, boosted profitability, said Milind Sarwate chief of finance. “In terms of segments we were able to achieve last year’s full turnover in the first three months itself,” Sarwate said, adding the enhanced scale of operations boosted profits.
He said Marico would maintain volume growth in the double digit range. Marico’s flagship brand ‘Parachute’ grew about eight percent while ‘Saffola’ grew 18 percent in volumes over the year.
Costs of safflower and copra, key raw materials for Marico, dropped by a fifth from last year boosting operating margin to 14.8 per cent from 12.9 per cent. “My hunch is that in terms of operating margins we will remain on a plateau. Our goal has always been to maintain margins between 14 per cent and 15 per cent,” Sarwate said.
Source: Reuters
