Marico's ad spends go up 11.82% YoY to Rs 246 crores in Q3FY24

In the third quarter ended December 31, 2023, Marico recorded a 11.82% spike (YoY) in its spending on advertisements and sales promotion as it spent Rs 246 crores in Q3FY24, as opposed to Rs 220 crores it spent in Q3FY23.

This time around, the FMCG major’s net profit was also up 15.92% from Rs 333 crores in the third quarter of the previous fiscal year to Rs 386 crores in the corresponding quarter, this fiscal.

However, the conglomerate has incurred a minor 1.79% loss in its total income in the third quarter ended December 31, 2023. In the corresponding period of the previous fiscal year, Marico’s total income amounted to Rs 2,510 crores.

On the other hand, what has improved is Marico’s total expenses as the same has gone down 4.63%. In the third quarter of the current fiscal year, the company had incurred a total expense of Rs 2,067 crores, as against Rs 1,970 crores in the corresponding period of last fiscal.

In its regulatory filing, Marico also mentioned that in Q3FY24, its revenue from operations was at Rs 2,422 crore, down 2% YoY, with underlying volume growth of 2% in the domestic business and constant currency growth of 6% in the international business. 

“During the quarter, demand trends were stable with no visible improvement from the preceding quarter. Rural demand remained soft, while urban demand steadied its moderate growth trajectory. Within the FMCG sector, mass home and personal care categories aligned closely with the trajectory of rural demand, while packaged foods led the sector owing to higher urban salience and penetration-led growth. Among channels, General Trade continued to drag as it grappled with liquidity and profitability constraints, while alternate channels grew healthily. In response to the extended slowdown witnessed in the GT channel, the Company took some measures during the end of Q3 to alleviate ROI challenges faced by channel partners, which could potentially pave the way for a structural recovery in the growth prospects of the channel,” the company mentioned.

In Q3FY24, Marico’s India business also posted volume growth of 2%, which dipped sequentially primarily due to a stock reduction undertaken across key portfolios as a part of the aforesaid initiatives to support the company’s GT channel partners.

Of all the Marico brands, it was Parachute Rigids which registered a 3% volume growth with loose to branded conversions picking up some pace, Value-Added Hair Oils grew by 3% in value terms amid slower rural demand, Saffola Edible Oils registered a mid-single digit volume decline, which was attributable to a high base and extended sluggishness in trade sentiment resulting in lower inventory levels on a year-on-year basis despite healthy offtakes along with Foods continuing its steady growth trajectory with 18% value growth YoY and Premium Personal Care sustaining its strong double-digit growth trajectory during the quarter.

The domestic revenue of the FMCG major was also down 3% YoY to Rs 1793 crores, lagging volume growth as some pricing corrections in key portfolios were yet to anniversarise. On the other hand, the offtakes remained healthier across key portfolios with 75%+ of the business either gaining or sustaining market share and penetration levels.

Moreover, the International business of Marico delivered mid-single digit constant currency growth dragged by transient macroeconomic headwinds in Bangladesh while other regions delivered a resilient performance.

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