Marico expects a “volume-led growth” in the domestic market and gains in market share by most of its products
New Delhi: Homegrown FMCG major Marico expects its gross margins to improve by 200-250 bps in FY24, helped by cooling commodity inflation and portfolio mix normalizing favorably.
The company expects a “volume-led growth” in the domestic market and gains in market share by most of its products and increase spending in advertising & promotion (A&P), said Marico in its latest annual report.
“On the domestic business, we will drive volume-led growth and market share gains across our portfolios, aided by distribution expansion, aggressive cost controls and adequate investment in market development and brand building,” said Marico, which owns Saffola, Parachute, Hair & Care, among other brands.
On the rural market, Marico said it will “keenly monitor” growth and is hopeful of a recovery in demand, considering a good harvest season, forecast of a normal monsoon and increase in government spending.
On the input cost front, key input materials, other than crude oil derivatives, have stabilised at lower levels, it added.
“We expect our gross margins to improve by 200-250 bps in FY24, given the cooling off in commodity inflation and portfolio mix normalizing favorably. A&P investments will continue to be a key thrust for growth,” it said.
“Owing to these factors, consolidated operating margin should move up by at least 100 bps on a year-on-year basis in FY24,” the company said.
Marico further said it is targeting to deliver 13-15% revenue growth in the medium-term on the back of 8-10% domestic volume growth and double-digit constant currency growth in the international business.
“We remain confident of the medium-term prospects of the FMCG sector in India as near-term headwinds of inflation and demand slowdown settle down. We shall be committed to making progress, along the core strategic areas of diversification, distribution, digital and diversity that shall enable us to deliver sustainable and profitable growth over the medium-term,” it said.
In FY23, Marico’s consolidated turnover was Rs 9,764 crore.
