The Financial Express
Consumer goods major Marico on Monday said it expected to deliver mid-single digit volume growth and stronger gross margins in the quarter ended March 31, as volume trends showed signs of improvement and raw material prices moderated during the period.
The disclosures were made as part of its quarterly update for Q4, where the company said it saw gradual recovery in fast-moving consumer goods (FMCG) demand.
“While urban and premium categories were stable, easing of broader commodity inflation bodes well for overall consumption trends, especially in rural markets,” the company said.
Marico, which has the Parachute and Saffola brands in its portfolio, said gross margin was expected to expand and “drive reasonable growth in operating profit” as raw material prices fell.
Retail inflation in February eased to 6.44%, but has been above the Reserve Bank of India’s upper tolerance band of 2% to 6% for months. Commodity inflation has hurt rural FMCG demand over the last few quarters, which Marico says will improve over the coming months based on a variety of improving macro indicators.
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“A healthy monsoon season, however, will be critical for the same to materialise,” Marico said.
The last time Marico posted a double-digit growth in revenue was five quarters ago. For Q4, the company expected to post low single-digit growth in revenue, with Parachute Coconut Oil likely to post high single-digit volume growth. While value-added hair oils would touch double-digit value growth and Saffola oils would be stable, the company said.
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