Marico Q2 results preview: Net profit likely to rise 12% to Rs 345 crore; expected to see strength in gross margin

Marico Q2 results preview: FMCG major Marico — whose popular brands include Parachute, Nihar, Saffola, Livon and Set Wet — is all set to report its financial results for the July-September quarter today, October 30. Analysts expect the Mumbai-based FMCG major to stage a decent performance.

According to Zee Business research, Marico's quarterly consolidated net profit is estimated to be at Rs 345 crore, translating to growth of 12 per cent compared with Rs 307 crore the corresponding period a year ago, the impact on profit growth is expected to be seen due to increasing add spends.  

The analysts peg its revenue to dip one pr cent to Rs 2,479 crore for the second quarter of the current financial year as against Rs 2,496 crore for the year-ago period.

Zee Business analysts see the company reporting Rs 484 crore in earnings before interest, taxes, depreciation and ammortisation (EBITDA), marking a year-on-year growth of 12 per cent against 433 crore logged in a year ago period. They peg the company's margin — a key measure of profitability — for the three-month period at 19.5 per cent as against 17.3 per cent a year ago. Operating profit margin are expected to improve whereas the company is also expected to see strength in gross margin (YoY).

Marico is expected to register domestic volume growth in low single digits on YoY. The company is also expected to register an increase of 3-4 per cent for the September quarter due to certain factors including a low single digit volumes in Parachute coconut oil, Saffola edible oil sales, according to the research.

H2 expected to be better due to improvement in global demand, domestic demand as per Zee Business. Double digit CC growth in international business is expected. Rural recovery slower than expected, as per Zee Business's research.

How Marico fared in July quarter

Marico reported a consolidated net profit of Rs 427 crore for the quarter ended June, beating analysts' estimates. The company had reported a net profit of Rs 371 crore for the corresponding period a year ago.

Its revenue came in at Rs 2,477 crore for the first quarter of the current financial year, as against Rs 2,558 crore for the year-ago period, according to a regulatory filing.

Marico shares

As of October 27, the Marico stock had risen nearly four per cent in the past year, underperforming an over seven per cent gain in Nifty 50.