Marico Q2FY25 Results Preview: PAT to likely grow 9%; margin may decline

FMCG major Marico is scheduled to report its financial performance for the July-September quarter later today, October 29, 2024. Zee Business analysts expect the Mumbai-based edible oil manufacturer to stage a decent performance during the review period.

Consolidated PAT or profit after tax at the company is seen to increase 9 per cent year-on-year (YoY) to Rs 384 crore as against Rs 353 crore reported during the same quarter last year. In Q1FY25, the fast-moving consumer goods (FMCG) company posted consolidated net profit of Rs 464 crore. 

Revenue from operations at the company is also estimated to rise 7 per cent on-year to Rs 2,641 crore while the same was at Rs 2,476 crore in the corresponding period last year.

EBITDA or earnings before interest, taxes, depreciation, and amortization during the review period is estimated to register 6 per cent growth on-year to Rs 526 crore. During Q2FY24, EBITDA stood at Rs 497 crore. The company's profitability in terms of EBITDA margin is however seen to take a marginal hit with margin during the review period estimated at 19.9 per cent, a 0.2 per cent or 20 bps decline YoY.

Marico's Q2 Business Update 

In the quarterly business update, the FMCG company said the sector witnessed stable demand trends with rural outperforming urban on a year-on-year basis for the third quarter.  In the given context, the domestic business posted mid-single digit volume growth, exhibiting improvement on a sequential basis, it added.

Parachute Coconut Oil posted close to mid-single digit volume growth. The brand recorded double-digit revenue growth, aided by pricing interventions made at the start of the year. The brand has taken another round of price increase at the end of this quarter given the sequential rise in copra prices.

Saffola Oils posted low single digit revenue growth, while the pricing cycle for the brand turned slightly favourable after 8 quarters. Value Added Hair Oils was subdued amidst competitive headwinds in the bottom of the pyramid segment, but we expect gradually improving demand trends ahead on the back of visible ATL investments and brand activations across key franchises. Foods and Digital-first brands sustained their visibly strong momentum and scaled up well ahead of aspirations, thereby maintaining the pace of diversification as envisaged.

The International business delivered robust low teen constant currency growth with each of the markets contributing positively.

Marico's share price performance

Over the past year, shares of the country's leading FMCG company have rallied 17 per cent. At the last count, ahead of its results later today shares traded with a negative bias down by over 1 per cent or Rs 7.6 at Rs 626.45 per share.