Marico Ltd has achieved a turnover of Rs. 7.9bn during Q1 FY11, a growth of 13.4% over Q1 FY10. The volume growth underlying this revenue growth was healthy at 16%. The value growth was lower owing to deflation in some of the company’s key input materials, part of which the company chose to pass on to the consumer, during the second half of last year, in order to expand its consumer franchise.
Profit after tax (PAT) for Q1 FY11 was Rs 740mn, a growth of 32% over Q1 FY10.
Marico has kept up its track record of sustained growth. Q1 FY11 is in Y-o-Y terms, the:
39th consecutive Quarter of growth in Turnover and
43rd consecutive Quarter of growth in Profits
Consumer Products Business – India
Parachute, Marico’s flagship brand, continued to expand its franchise during the year. Parachute coconut oil in rigid packs, the focus part of its portfolio, grew by ~14% in volume as compared to Q1 FY10. Parachute’s volume share during the 12 months ended June’10 was 46%. Together with Nihar and Oil of Malabar, Marico’s volume share in the branded coconut oil segment in India was 53.3% in the Rs. 1900 Cr branded coconut oil market.
Marico’s second flagship brand, Saffola, is positioned strongly on the ‘good for the heart’ platform and rides the trend in increasing concern around health and heart health in India. With this increasing awareness several households have begun using Saffola, as part of their adoption of a healthier lifestyle. The super premium niche of the branded refined edible oils market thus continues to expand. During Q1 FY11, Saffola refined oils recorded a strong volume growth of ~17.5% over Q1 FY10 and continued to maintains its leadership position. The higher volumes are expected to increase the customer base for Saffola as the brand has a high retention rate.
During Q4 FY10, Saffola Arise was launched across key Saffola markets, at invitational pricing and has been supported by insightful advertising. The initial performance has been encouraging with indications that repeat purchases are taking place. With its health positioning, the company hopes to create a sizable franchise for itself, in the rapidly growing Rs. 400 Cr packaged rice market, over the next two to three years. In line with its strategy to launch foods under Saffola, the company introduced Saffola Oats in the month of June 2010. The product is being prototyped primarily in the Modern Trade format, in select cities across India.
With rising incomes, there has been an opportunity to serve consumers looking for value added options for their hair oiling needs. During the quarter, all Marico’s hair oils brands recorded healthy growth. The company’s hair oils portfolio in rigid packs grew by ~27% over Q1 FY10.
With the objective of generating trials and expanding its base, Shanti Badam Amla, which comprises a relatively small part of Marico’s hair oils portfolio, commenced an aggressive price- off this calendar year. This has led to the brand increasing volumes by 92% during Q1 FY11 over Q1 FY10. It is hoped that most of the trialists will remain with the brand. Last year, the company relaunched Parachute Therapie, a coconut oil based hair vitalizer that heals damaged roots and controls hair fall, in a 100 ml pack size, at a price point of Rs 100. This has received a good response.
In order to increase its participation in the hair oils segment, the company is currently prototyping two differentiated cooling oil variants in Bihar and Andhra Pradesh which is meeting action standards
Marico’s hair oils franchise had a volume market share of 21.6% during the 12 months ended June 2010. The market share has grown by 150 basis points in Q1 FY11 over Q1 FY10.
Saugata Gupta, CEO-Consumer Products, commented, “We are encouraged by the expansion in franchise across all three major segments – coconut oil, premium refined edible oil and value added hair oils. This sets us up to deliver strong volume growth during the year as planned.”