Marico shares soar 10%; HUL, Dabur up 6%

Shares of fast-moving consumer goods companies gained up to 10% on Tuesday even as the broader benchmark indices – the BSE Sensex and Nifty 50 – were trading 1% lower.

Marico, which posted a 5% rise in its consolidated net profit at ₹320 crore, saw its stock surge over 10% in intraday trade to ₹586.55 on the BSE. The FMCG major said it expects a gradual uptick in the growth of its core categories through ongoing initiatives to enhance profitability. EBITDA margin for Q4 FY24 stood at 19.4%, up 186 basis points on a yearly basis.

In the fourth quarter, the company’s revenue from operations was at ₹2,278 crore, up 2% year-on-year, with volume growth of 3% in the domestic business. Marico says it witnessed an uptick in rural sentiment towards the end of the quarter. “The domestic operating environment during the quarter was closely akin to the preceding quarters of this year. Across various FMCG categories, premium and urban-centric segments stayed ahead of rural and mass segments,” it said.

The maker of Parachute coconut oil says alternate channels continued to gain salience vis-à-vis general trade as the latter has been contending with subdued realisations and profitability headwinds.

The owner of the Saffola edible oil says consolidated revenue growth has moved into positive territory in Q4 and is expected to trend upwards during the course of FY25. “We expect domestic revenue growth to outpace volume growth from Q1 FY25. We have delivered our highest-ever operating margin in FY24 led by robust gross margin expansion, even while investments towards brand-building remained a key thrust area. We will continue to drive steady progress towards our key strategic objectives in the domestic as well as the International businesses and aim to deliver healthy revenue-led earnings growth in FY25,” the FMCG major says.

Marico achieved positive EBITDA in Beardo in FY24 through premiumisation and scale benefits and aims to move towards double-digit EBITDA margin next year. “We will aim to replicate the Beardo playbook as we scale the Digital-first franchises and achieve double-digit EBITDA margin in the portfolio in FY27,” it says.

“We have closed fiscal 2023-24 on a promising note, delivering our highest-ever annual operating margin with sequential improvement in both the domestic and international businesses. In the domestic business, we expect a gradually improving growth trajectory in the core categories through ongoing initiatives to enhance GT (general trade) channel partner profitability and transformative expansion in direct reach via Project SETU, while we aggressively drive the profitable scale up of foods and digital-first brands,” says Saugata Gupta, MD and CEO, Marico.

Shares of other FMCG players like Hindustan Unilever (HUL) and Dabur rose 6% in intraday trade to ₹2389.75 and ₹566.75 respectively on the BSE.