Indian FMCG giant Marico Limited increased its ad spend to 14% YoY during quarter three of the fiscal year 2022 with a vision to continue to invest in brand-building despite significant inflationary pressures and compression on profitability due to the impact of Covid-19.
Marico spent Rs 223 crore on advertising and promotions in the quarter ending December 2021, up 13.77% from Rs 196 crore in the corresponding quarter of the previous fiscal year. It had spent Rs 194 crore in Q2FY22.
Advertising and Promotions spending was at 9.3% of sales, as the company consciously ramped up investments to combat the current weaker consumer sentiment and prioritise brand building for the longer term, despite short term gross margin headwinds.
The ad spends in Q2FY22 stood at 8% of sales.
In Q3FY22, revenue from operations grew by 13% YoY to Rs 2,407 crores with both the domestic and international businesses posting healthy double-digit revenue growth. The Foods franchise has procured about Rs 500 crore in revenues in FY22.
The net profit for the latest quarter stood at Rs 317 crore, marginally up from Rs 312 crore in Q3FY21.
The company has an aim to increase and bring in a strong digital transformation to make the products available everywhere increasing their market share. It is planning on introducing a portfolio of at least three digital brands, either organically or inorganically, with a combined turnover of Rs 450-500 crores by FY24.
Saugata Gupta, MD & CEO, Marico Limited, said, “The domestic business has delivered a resilient performance in the face of significant deceleration in the overall market growth in staples. Despite ongoing input cost pressures, we consciously stepped up investments to protect the long-term health of our brands, thereby leading to robust market share and penetration gains across our portfolio. The international business had another stellar quarter with all markets playing their part. With commodity prices cooling off, we expect profitability to pick up in the forthcoming quarters. We will continue to drive consistent and profitable growth over the medium term through premiumisation in core categories, scaling up of new growth engines, sharper go-to-market, aggressive cost management and optimal brand-building investments.”