Marico Limited revived its advertising and promotion expenses in Q2FY21 to the near level of the previous year’s spends.
The Indian FMCG giant spent Rs 189 crore in the quarter ending September 30, 4% down from Rs 197 crore in the corresponding quarter of the previous year.
The Q2 ad spends rose 38% from Rs 137 crore in Q1FY21.
In Q2FY21, Revenue from Operations grew by 9% YoY to INR 1,989 crores (USD 270 million), with a robust underlying domestic volume growth of 11% and constant currency growth of 7% in the international business.
With improving consumer sentiment and supply chain operations at near pre-COVID levels, majority of the Company’s portfolio came back to healthy growth on a year-on-year basis. This was further reflected in a strong delivery in traditional trade and ECommerce, though the Company continued to operate at reduced distributor inventory levels to protect channel partner ROIs in the current environment.
Input costs witnessed an uptick, however, Marico contained the impact through aggressive cost-saving initiatives and optimisation of A&P spends in discretionary categories, thereby enabling an improvement of EBITDA margins to 19.6%. As a result, EBITDA and like-to-like PAT grew by 10% and 15% respectively. Reported PAT grew by 7%.
Saugata Gupta, MD & CEO, Marico Limited, said, “The sector has witnessed some green shoots of revival in consumer sentiment with the gradual easing of lockdown restrictions imposed to curb the ongoing COVID-19 pandemic. Moreover, the inherent strength of our trusted franchises and deep distribution network have allowed the Company to deliver a strong Q2 with broad based doubledigit volume growth in the domestic business and a stable performance overseas. The pandemic has led to some perceivably lasting changes in consumer behaviour, opening up exciting opportunities especially in the healthy foods and immunity-boosting categories. While staying on course in our core portfolios, we have been aggressively strengthening our play in fulfilling these evolving needs of our consumers through a bouquet of launches in these newer segments. The Company will continue to rely on executional excellence and agility to grow its existing portfolios as well as scale up new bets in order to deliver steady and profitable volume-driven growth over the medium term.”