Image Courtesy: The Financial Express
Marico Ltd (MRCO.NS), an Indian consumer products company, said that sales growth slowed in the third quarter, reducing operating profit, due to a slow recovery in rural demand amid rising prices.
Marico, well known for its Parachute hair oil brand, predicted third-quarter consolidated sales growth in the low single digits.
As per Refinitiv data, three analysts estimate the company’s sales growth to accelerate to 4.7% in the October-December quarter, up from around 3% in the previous quarter.
“In view of the lower revenue growth, we expect a modest growth in operating profit,” Marico said in a statement.
Marico anticipates gross and operating margins to rise in the third quarter as major input costs and consumer pricing in key franchises stabilise.
While the urban and premium categories grew steadily, “recovery in rural demand was not as noticeable since retail inflation remained excessive,” Marico said.
Even while annual retail inflation in India fell slightly in October and November, this was mostly owing to decreasing food costs, while core inflation remained high for a long time.
According to the firm, sales of Parachute hair oil increased in the low single digits following a “visible rebound” in December. In the prior quarter, Parachute’s revenues decreased by 3%.
Yet, the value-added hair oils market experienced a slow quarter, according to the report.
Marico said that the value of its Saffola edible oil franchise increased by double digits.
The stock has dropped nearly 6% since the business released second-quarter earnings on November 4th.