MUMBAI: Marico’s 2Q Advertising And Sales Promotion (A&P) spends was up 8% YoY, as the company sustained investments towards strategic brand building.
Marico spent 10.9 per cent of revenue on A&P in Q2 compared to 10.8 per cent for the previous fiscal’s Q2. For the first half of the fiscal it spent 10 per cent of revenue on A&P compared with 9.7% in the previous fiscal’s first half.
In Q2FY25, Revenue from Operations was at Rs. 2,664 crore, up 8% YoY, with underlying volume growth of 5% in the domestic business and constant currency growth of 13% in the international business.
During the quarter, the company witnessed stable demand trends in India with rural growing at 2x the pace of urban on a year- on-year basis. Pricing growth for the sector turned positive on a YoY basis as brands effected price increases in response to rising commodity prices.
The domestic business maintained its improving volume growth trajectory on the back of healthy trends across most of the core and new franchises. Offtakes remained strong as more than 80% of the business either gained
or sustained market share and penetration both on a MAT basis. Domestic revenue was Rs. 1,979 crore, up 8% YoY, as volume growth was supplemented by price hikes in the Coconut Oil portfolio and favourable reversal in the pricing cycle in Saffola Oils. Alternate channels continued to gain salience vis-à-vis General Trade.
After the successful initiation in the preceding quarter, Project SETU was extended to four more states, taking the tally to 10 states. The execution at the state level has progressed as planned, supported by robust governance
mechanisms to ensure sustainable outlet expansion.
The International business exhibited persistent strength across all key markets, underpinned by strong fundamentals and enduring growth potential.
Gross margin expanded by 30 bps YoY, as the impact of higher input costs in the core portfolios of the domestic business was more than offset by healthy margin improvements in the digital-first franchises in India
and international businesses. EBITDA margin stood at 19.6%, down 50 bps YoY and EBITDA grew by 5% YoY.
Reported PAT was up 20% due to one-off gains, on the sale of fixed assets and favorable settlement of a past litigative claim (both classified under ‘Other Income’), amounting to Rs. 42 crores. PAT (excluding one-offs) was up 10%
Saugata Gupta, MD & CEO, commented, “We closed the first half of the fiscal on a fairly positive note with the growth trajectory of the business heading in the right direction. We have delivered healthy volume-led revenue growth in the domestic business buoyed by sustained market share and penetration gains across core portfolios. Foods and Digital-first brands continued to ramp up impressively and reinforce the diversification agenda. The international business has exhibited remarkable strength despite challenging operating conditions in select markets. We will take calibrated pricing actions in response to the rising trend in input costs, while focusing on achieving our stated growth aspirations for the year.”
