2024-01-29 11:12:00
Indian company Marico on Monday reported better-than-expected third-quarter profit as lower raw material costs offset falling revenue.
The consumer goods maker reported net profit of 3.83 billion rupees ($46.1 million), up nearly 17% from last year, and beating analysts’ estimate of 3.74 billion rupees according to LSEG data.
The company’s total expenses declined by around 5% to Rs 19.7 billion as input costs fell by 21.6% on the back of dried coconuts or copra, edible oils and derivatives cheaper raw materials.
As a result, its earnings before interest, taxes, depreciation and amortization (EBITDA) margin increased to 21.2% from 18.5% last year.
Marico’s revenue, however, fell 2% to Rs 24.22 billion, in line with forecasts made earlier this month, which called for a single-digit decline in revenue due to weaker rural demand.
Sales of “Parachute” coconut oil, which accounts for 34% of national revenue, increased by 3%. Sales of “Saffola” edible oils declined while those of hair oils increased, the company said without specifying the figures.
The company said it remained optimistic regarding a recovery in demand this calendar year, citing improving macroeconomic indicators, government spending and “favorable” consumer prices in a “cost environment.” ‘benign inputs’.
Earlier this month, rival Hindustan Unilever reported lower-than-estimated profits, due to intensifying competition in the consumer goods sector and continued weak demand in rural areas.
Marico shares fell 2.3% in the December quarter, compared with a 10.4% gain for the Nifty consumer goods index ($1 = 83.1160 Indian rupees) (Reporting by Praveen Paramasivam in Chennai and Navamya Ganesh Acharya in Bengaluru; Edited by Varun HK)
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