Share of Marico rose 2 per cent to hit an intraday high of Rs 529.80 on BSE after the company announced its operating performance for the first quarter of FY22.
“The India business delivered 30% plus revenue growth, backed by robust double-digit volume growth. A marginal correction of the historical revenue skew from Q1 towards the previous quarter (Q4FY21) is imputed into this quarter’s performance.,” the company said.
The stock opened 1.63 per cent higher at Rs 528.00 against the previous close of Rs 519.50 on BSE. Market cap of the firm rose to Rs 68,088.36 crore.
The FMCG major has gained 47 per cent in the last one year and risen 31 per cent since the beginning of this year. The share stands higher than 5 day, 10 day, 20 day, 50 day, 100 day, and 200 day moving averages.
“Demand in South and West India, which are relatively higher salience regions for the company, was particularly slower due to heavier caseloads and extended lockdown restrictions. As COVID positivity rates subsequently dropped to pre-second wave levels, overall demand has been trending better since early June,” the company noted.
“Premium Personal Care (constitutes less than 5% of domestic revenues) also recovered sharply over last year, but ended below pre-COVID levels,” it added.
The International business posted constant currency growth in the low 20’s on the back of sustained momentum in Bangladesh and broad-based recovery across other markets.
The company further informed that as key input costs started easing after peaking at the start of this quarter, gross and operating margins should see significant sequential improvement in Q1 and thereafter trend towards medium-term expectations.
However, operating margin in the quarter will drop sharply on a year-on-year basis, given the exceptionally high base (due to rationalisation of A&P spends and other overheads in the base quarter) and the arithmetic (high denominator) effect of significant pricing-led growth. Owing to the above, the company expects muted bottom-line growth in the quarter.
Recently, Marico share hit all-time high after the foreign broking house Credit Suisse raised the target price of the FMCG stock to Rs 600 from Rs 490 per share earlier.
In Q4 of the previous fiscal, the FMCG firm reported a 14.07 per cent rise in its consolidated net profit at Rs 227 crore against a net profit of Rs 199 crore in the January-March quarter a year ago.
Revenue from operations of the Mumbai-based firm rose 34.49 per cent to Rs 2,012 crore in Q4 against Rs 1,496 crore in the corresponding period of the previous year.