Advertisment

Marico ups ad spends in the India business by 14% in Q3FY18

The India business reported a turnover of Rs 1,285 crore, a growth of 19% over the same period last year

author-image
BestMediaInfo Bureau
New Update
Marico ups ad spends in the India business by 14% in Q3FY18

Indian FMCG major Marico Limited said that its Advertising and Sales Promotion spends in the India business was higher by 14% in Q3FY18 on a comparable basis.

In the quarter ended December 31, 2017, Revenue from Operations was at Rs 1,624 crore, a growth of 15% YoY. EBITDA was at Rs 302 crore, up 11% YoY and PAT at Rs 221 crore, up 17% YoY.

The India business posted a healthy volume growth of 9.4% and a resilient margin performance. In an uncertain business environment, continued offtake growth coupled with market share gains affirmed the underlying strength of the franchise.

The India business reported a turnover of Rs 1,285 crore, a growth of 19% over the same period last year. The operating margin during Q3FY18 was 22.2% before corporate allocations as against 24.3% for the same period last year.

The Union Budget 2018-19 is expected to improve the livelihood and disposable income in the hands of masses, especially in rural India. Green shoots in rural were visible through Q2 and Q3 this year. The Government's focus on agriculture, education, infrastructure, employment generation and healthcare should result in the continuance of this trend over the medium term.  

For Q4FY18 and beyond, the Company retains the target of 8-10% volume growth and healthy market share gains on the back of increased investment in the core portfolio, aggressive new product launches, distribution expansion, judicious pricing and tighter cost management.  

The International business grew by 9% in constant currency terms.  

Parachute Rigids portfolio (packs in blue bottles) posted a strong volume growth of 15% in Q3FY18 achieved due to a combination of competitive pricing and initial signs of shift of business from unorganised to organised players due to GST implementation. The Coconut Oil franchise outperformed the category growth, evident from market share gains of 144 bps to ~59%, during the 12 months ended December 2017.

The Saffola Refined Edible Oils franchise recorded a flat quarter in volume terms. The increased price premiums of Saffola Edible Oils over competing single seed edible oils resulted in the temporary blip during the quarter. Despite a flat growth, the brand maintained its leadership position in the super premium refined edible oils segment with a 68% volume market share on an exit basis. The growing consumer trend towards healthier culinary choices and the strong brand equity continue to lend confidence in the medium term potential of the franchise.

The Healthy Foods franchise grew by 24% in value terms. Saffola Masala Oats (SMO) maintained its momentum, on the back of focused inputs and a renewed promotional campaign, which led to a consolidation in its value share to 70% (Dec 2017 MAT) in the flavoured oats category.

During the quarter, we further extended Saffola’s footprint in the space of Weight management & Fitness with the launch of a range of Saffola Active Soups in November 2017, which is currently being prototyped in Mumbai. These are available in 5 flavours - Tangy Tomato, Creamy Sweet Corn, Fiery Hot & Sour, Garden Vegetables and Simmering Manchow in 2 formats – a Single-serve instant soup sachet at Rs 10, as well as multi-serve ready-to-cook packs at Rs 55.

The Value-added Hair Oils franchise registered a volume growth of 8% during the quarter. A slowdown in CSD sales was a drag on the performance. Volume growth ex-CSD was at 11%. Despite this headwind, the Company further strengthened its market leadership by 104 bps to a volume share of ~34% and with a value share gain of 109 bps to ~26% (MAT December 2017). Nihar Naturals Shanti Amla Badam grew impressively and maintained its market leadership in volume terms within the Amla hair oil category.

Premium Hair Nourishment and Male Grooming portfolios staged a recovery after having declined in the last 4 quarters.

Male Grooming portfolio grew by 36% in value terms on a comparable basis, led by a sharp recovery in Set Wet Hair Gels. The value market share of Set Wet Hair Gels currently stands at 58%, constituting circa 55-60% of total Male Grooming Portfolio.

Marico’s International Business achieved a turnover of Rs 340 Crore (USD 52 million) in Q3FY18 with an underlying constant currency growth of 9%. The operating margins (before corporate allocations) are at 14.9% in Q3FY18 as against 16.1% for the same period last year. 

Bangladesh continued its good run with a double digit constant currency growth and recovery in the Middle East resumed, while the temporary slowdown in Vietnam was a drag on the performance. 

Commenting on the Q3FY18 performance, Saugata Gupta, MD & CEO, Marico, said, “We had a stable quarter marked by healthy growth in most franchises with a sustained momentum in offtake growth and market share gains. We are witnessing early signs of revival in consumer sentiment, especially in rural. The Government thrust on rural growth can be expected to fuel this trend further. We will continue to focus on execution and strengthening our brands in our endeavor to deliver sustainable profitable growth over the medium to long term.”

Info@BestMediaInfo.com

Marico Q3FY18
Advertisment