Marico said that overall consumption trends during the quarter belied expectations of the beginning of a revival in sentiment which were built on the back of good monsoons and announcement of various government measures. Category growths across personal care remained under pressure, while foods and allied categories fared relatively better.
However, the company continued to consolidate market shares across key franchises. The traditional channel stayed weak, as channel partners continued to face liquidity challenges amidst a soft demand environment. Growth in modern trade and e-commerce also slowed down, partly due to specific price management measures taken in these channels to counter inter-channel conflict.
In the India business, the Saffola oils and foods portfolio delivered healthy double-digit volume growth. However, due to a decline in coconut oil, hair oils and other portfolios, the India business as a whole posted a marginal decline in volume growth.
The International business posted high single-digit constant currency growth with the Bangladesh business holding firm, while other geographies lacked fervour.
EBITDA margins are expected to improve year-on-year given benign input costs, which should translate to reasonable growth in the bottomline.
Marico expects some green shoots of recovery in Q4, on the back of focused marketing initiatives and pricing interventions taken in key portfolios, which have hit the shelves in the late stages of Q3 post clearing of older inventory in the channel.
The company said it will continue to drive sustained profitable volume-led growth over the medium term, through its focus on strengthening the franchise in the core categories and driving the new engines of growth towards gaining critical mass.
Marico posted 16.5% rise in consolidated net profit to Rs 247 crore in Q2 September 2019 over Q2 September 2018. Net sales during the quarter under review were down 0.44% to Rs 1,829 crore as against Rs 1837 crore in the corresponding quarter of the previous fiscal.
Marico is a leading Indian group in consumer products in the global beauty and wellness space.