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Chennai, NFAPost: Consumer goods companies operating in the global beauty and wellness space, Marico, posted a 23.17% jump in its net profit at Rs 388 crore in the first quarter of this financial year compared to Rs 315 crore in the corresponding quarter of the last year.

Its revenue from operations fell 11.12% to Rs 1,925 crore during the first quarter compared to Rs 2166 crore in the corresponding quarter last year. The company said its domestic business was severely impacted in April due to supply-chain disruptions following the extension of the national lockdown but was able to scale up sequentially in May and June as restrictions were relatively eased (volumes grew 3% in the May-June period on a year-on-year basis). The domestic business clocked sales at 104% of the annual average monthly run rate of FY20.

The company in its filings to BSE said the COVID-19 pandemic and subsequent partial/complete lockdowns had its impact on the international markets in varying degrees. While the international business de-grew by 4% in constant currency terms, Bangladesh continued to hold the fort by delivering a commendable 10% constant currency growth, while other geographies recorded double-digit drops.

India Business

The domestic business delivered a turnover of Rs 1,480 crore (USD 197 million), down 15% on a year-on-year basis, impacted by the disruption in supply chain due to the continuing lockdown during the quarter to contain the outbreak of COVID-19. The operating margin improved to 25.7% in Q1FY21 as against 22.6% in Q1FY20 due to benign input costs, rationalised A&P spends and overall cost control.

Parachute Rigids declined by 11% in volume terms on a high base (9% volume growth in Q1FY20) and heavily skewed sales in the first quarter last year. The brand remained on a firm footing as lockdown restrictions eased and recorded sales at 111% of annual average monthly run rate of the last year.

The brand also reinforced its hygienic processing and safety credentials in the minds of consumers with the launch of the “Untouched by hand” campaign. The volume market share of the Coconut Oil franchise (includes Nihar Naturals and Oil of Malabar) strengthened by about 180bps to 62% (MAT Jun’20).

With mild deflation expected in copra prices, the company will actively pass on value to consumers to maximize market share gains from branded coconut oil and accelerate upgradations from loose coconut oil. Of the total coconut oil market, approximately 30-35% in volume terms is unorganised (sold in unbranded loose packs). This component provides headroom for growth to branded players.

The company’s flagship brand Parachute, being the market leader, is well placed to capture a significant share of this growth potential on a sustainable basis. The company operates in a band of gross margin per unit and will take judicious pricing decisions to maintain a sweet spot between volume growth and margins. The company would continue to exercise a bias for franchise expansion as long as margins remain within a band. Towards that end, the company will continue to invest behind brand building and tactical inputs to remain competitive. Therefore, given the market construct and brand equity, the company expects to deliver 5-7% volume CAGR in Parachute Rigids over the medium term.

Hygiene segment

The company had forayed into the Hygiene segment with the launch of Mediker Hand Sanitizer and Veggie Clean in April. Both have witnessed healthy traction and the company will continue to invest for growth in these franchises. During the quarter, the company also launched indoor and outdoor surface disinfectants under the aegis of new brands, House Protect and Travel Protect, respectively. The brand is now available on Amazon and Flipkart, and will soon be introduced in General Trade.

Marico’s digital-first Hygiene brand ‘KeepSafe by Marico’ was launched in mid-June on all leading ECommerce channels. The KeepSafe range has been developed keeping in mind the complete out-of home hygiene needs and includes multi-purpose disinfectant spray, hand sanitizer, hygiene hand wipes, toilet seat disinfectant spray, feminine hygiene wipes and intimate wash for women.


  • Value Added Hair Oils declined 30% in volume terms, sharply impacted by the much-delayed resumption of billing in late April. Despite the slump in April, during the quarter, the franchise clocked sales at ~94% of the annual average monthly run-rate of FY20, primarily led by the bottom of the pyramid segment. As demand trends improved, the franchise grew in the May-June period.
  • Saffola Edible Oils, continuing its growth journey, posted 16% volume growth, building on strong brand credentials, ramped up presence and increased in-home consumption.
  • The Saffola Oats franchise grew 41%, backed by its inherent virtues of taste, health and convenience. The company broadened its play with the launch of Saffola Honey, with an assurance of purity, to meet the immunity-boosting needs of the consumer.
  • Premium Personal Care, comprising Leave-in Hair Serums, Male Grooming and Premium Skin Care, bore the brunt of the ongoing COVID-19 crisis on account of its discretionary nature, witnessing sharp declines.
  • The Hygiene portfolio started well with encouraging response to Mediker Hand Sanitizers and Veggie Clean. The company expanded the range with the launch of indoor and outdoor surface disinfectants, under the aegis of the brands House Protect and Travel Protect, respectively. Separately, a digital-first premium out-of-home hygiene range was also introduced under the brand KeepSafe.
  • In the International business, Vietnam, MENA and South Africa de-grew by 14%, 27% and 25% in cc terms, respectively.
  • A&P spends stood at 7.1% of sales, given the rationalization of spends in a subdued demand environment with supply constraints. After minimal spends in April, the company continued to invest for growth in the core portfolios in light of improving traction during the rest of the quarter. Similarly, Trade spends during the quarter were also rationalised accordingly.

“The company has delivered a fairly resilient performance in the quarter despite the pervasive impact of the ongoing COVID-19 crisis. Marico stands united and is working closely with its stakeholders to ensure safety and good health of all in these unusually difficult times,” said the company’s MD and CEO Saugata Gupta.

“After a significantly challenging April, the business has reached near normal levels and expects to deliver growth in the rest of the year. Market share gains in more than 90% of the portfolio has also been reassuring. We will continue to invest for growth in our core portfolio of trusted leader brands as well as adapt to evolving consumer needs in the areas of health, immunity and hygiene, while focusing on agility, excellence in execution, aggressive cost management and financial discipline,” he added.

The company’s medium-term Go-To-Market (GTM) strategy will be focused on improving the width and depth of its distribution. It is investing behind upgrading its distribution infrastructure in urban General Trade to ensure profitability of channel partners and expanding direct reach in rural markets. The company aims to ensure sustainable, harmonious and incremental growth in General Trade, Modern Trade and E-commerce through specific price and SKU management measures.

It is also focusing on Digital initiatives in a big way to improve consumer engagement, drive sales through E-commerce for internet-savvy consumers and build Data Analytics capabilities.

During 2019-20, Marico recorded a turnover of about Rs 7,310 crore ($ 1.03 billion) through its products sold in India and chosen markets in Asia and Africa.

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