India's Marico beats Q1 profit estimates on cooking, hair oil demand

Patanjali Foods

05/08/2024 10:06

CHENNAI/BENGALURU, Aug 5 (Reuters) - India's Marico
 MRCO.NS , which owns the Saffola and Parachute packaged oil
brands, reported a slightly bigger-than-expected increase in
first-quarter profit on Monday, helped by steady demand and said
its earnings would grow this year.
    The company's consolidated net profit rose 8.7% to 4.64
billion rupees ($55.4 million) in the April-June quarter, just
above analysts' average estimate of 4.63 billion rupees,
according to LSEG data.
    Total revenue from operations increased 6.7% to 26.43
billion rupees, marking its biggest growth in more than two
years. Revenue from India, which made up three-fourths of total
revenue, climbed 7.4%.
    For Marico, sales volumes for both cooking and hair oils
increased in the quarter. While the Parachute hair oil business
was helped by higher prices, its Saffola cooking oil business
benefitted from price cuts.
    Revenue growth will "trend upwards" on higher sales volumes,
including in the international business, with earnings also
increasing this financial year, Marico said in an investor
update.
    The company's shares were up 2.1% at 676.6 rupees at 14:05
IST, taking their gains for the year to more than 23%.
    Branded cooking oil sellers in India, including
Fortune-owner Adani Wilmar  ADAW.NS  and Ruchi Gold-owner
Patanjali Foods  PAFO.NS , typically book higher profits when
edible oil prices are stable, according to industry executives.
    Last month, both companies posted solid profits, also citing
a stability in edible oil prices.
    Overall, though, consumer goods makers have posted mixed
results.
    Dove soap-maker Hindustan Unilever  HLL.NS  reported higher
earnings as price cuts boosted demand, while KitKat-maker Nestle
India  NEST.NS  reported its slowest growth in eight years as
price hikes drove consumers away.
 
 ($1 = 83.8220 Indian rupees)

 (Reporting by Praveen Paramasivam in Chennai and Ashna Teresa
Britto in Bengaluru; Editing by Savio D'Souza)
 ((Praveen.Paramasivam@thomsonreuters.com; +91 867-525-3569;))