Stock in Action - Marico Ltd

Marico Ltd Stock Movement of the Day 

Why Marico Ltd Stock is in Buzz?

Marico Ltd. posted a consistent Q4FY24 performance, exhibiting year-over-year increase in multiple significant financial categories. When compared to the same period last year, the quarter's total sales of Rs 2,278 crore represented a slight increase of 1.69%. A solid earnings before interest, depreciation, and tax (EBIDT) of Rs 442 crore, or a noteworthy 12.5% year-over-year rise, was made possible by this growth in sales. In Q4FY24, the company's net profit increased by 5% to Rs 320 crore.

Marico Ltd. Q4-FY24 Result Analysis

The business increased its gross margin by a noteworthy 420 basis points (bps) year over year, demonstrating improved cost-of-goods-sold management. In a deliberate move to show its ongoing commitment to marketing and brand development, Marico also raised its advertising and promotion (A&P) budget by 8% annually. When combined with cost-cutting initiatives, this strategic investment resulted in an amazing 186 basis points increase in the company's EBITDA margin over the previous year.

Quick YoY comparison

all figures in ₹ crore

Positive Market Conditions and Company Outcomes

Marico's successful performance was influenced by a number of variables. The macroeconomic environment in India was largely favorable, which helped the company. Both the rural and urban markets showed steady trends, and the food and personal care (HPC) product categories showed comparable performance to the previous quarters. The trend of general economic growth has not changed, and the future looks bright.

Marico's performance in Q4FY24 was further bolstered by favorable market circumstances. These drivers included forecasts of a successful monsoon season in FY25, consistent government investment with fiscal discipline, attractive consumer pricing across FMCG categories, and a sequential increase in both local and abroad enterprises. Significantly, revenue growth became positive again, propelled by a 3% increase in volume in the home market and a 10% increase in constant currency in the overseas sector. The company reported that over the same period, 100% of its domestic business maintained or improved its market penetration, and 75% of its business either gained or maintained market share on a moving annual total (MAT) basis.

Forward-Looking: Strategic Priorities for Development

The management of Marico expressed optimism about the company's prospects for the future. Since price cuts in the domestic company were made in the first quarter of the previous year, they expect consolidated revenue growth to trend upward in FY25. In keeping with its stated goals, the company also recorded a record operating margin of 21% in FY24.

Marico Ltd. listed a number of important strategic goals for the coming years. Diversification is still a vital growth tactic. With the aim of tripling the size of the foods portfolio by FY27 and attaining a 20% compound annual growth rate (CAGR) in the foods industry, they intend to concentrate on growing their footprint in the foods segment. Marico Ltd. intends to take advantage of their improved digital skills in order to increase their online presence, acknowledging the growing significance of digital channels in the FMCG industry. By FY27, the company anticipates that the annual recurring revenue (ARR) of its digital-first brands would have doubled.

A major endeavor called Project SETU intends to spur growth by revolutionizing the direct reach of Marico Ltd. The goal of this project is to create a go-to-market (GTM) model that is both "fit for purpose and fit for future" in order to increase profitability and obtain a competitive edge. Marico Ltd also wants to keep growing its market share in both urban and rural areas across all categories. They want to accomplish this through carefully reallocating resources to increase coverage and create demand, emphasizing premiumization and diversification, and providing a greater product assortment in urban locations.

Due to strong financial performance, Marico Ltd.'s shares were valued at Rs 566.55 today, a 6.6% rise over yesterday's closing. In addition, the trading volume increased by a factor of 24. The return on the stock over the last month has been 14.87%.

As of 7 May 2024 Finance Summary
 

Marico Q4-FY24 Consolidated Profit & Loss Statement 

In summary 

The financial results for Q4FY24 for Marico Ltd. show that the business can maintain steady development in a cutthroat industry. The company has a solid product portfolio, a healthy economic outlook, and a clear focus on diversification, digital expansion, and growing market share, all of which position it for future success.