Marico Ltd.- Concall Takeaways

Net sales increased 7.8 per cent to Rs.669.56 cr in Q3FY’10 compared to Rs.621.01 cr in Q3FY’09, while PAT after minority interest increased by 22 per cent to Rs.62.19 cr in Q3FY’10 compared to Rs.50.89 cr in Q3FY’09

Parachute

Marico’s flagship brand, Parachute, achieved a volume growth of about 8% over Q3 FY09 in rigid packs. During the quarter, the prices of copra (dried coconut kernel) the raw material input for Parachute coconut oil were about 22% lower than in Q3 FY09. Even though there was some increase in December ’09, the rates for the month remained lower than in December ’08 by about 14%. As the company had begun observing a slow down in the conversion from loose oil into the “recruiter packs”, it reduced the retail price of Parachute’s 50 ml pack from Rs 12 to Rs 10 in November ’09. In addition it has initiated a reduction in the price of its 100 ml pack from Rs 21 to Rs 20 in January ‘10.

Saffola

The refined edible oils franchise of Saffola continued to show a healthy volume growth
During Q3FY10 the franchise grew by about 18%. This growth was aided by a consumer offer of 20% extra on selected SKUs of Saffola Gold and Saffola Active.

International FMCG Business

Marico’s international FMCG business has been steadily growing and comprises about 23% of the group’s turnover. Its key geographies are Bangladesh, MENA (Middle East and North Africa) and South Africa. In Q3FY10 the business grew by about 24% over Q3FY09.

Kaya Skin Clinic

During Q3FY10, Kaya’s skin care turnover grew by 10% over Q3FY09. At Rs.44 crore however, this was a decline of about 9% over the turnover achieved during Q2FY10. Given the discretionary nature of consumer spending at Kaya, the business has been impacted by the overall economic slowdown. The price increase taken by Kaya consequent to the imposition of service tax from September 1, 2009 has also acted as a dampener to growth. For clinics that have been in existence for over 12 months, the overall same clinic revenue in India has declined by 13%. While the clinics in Dubai have got impacted by the financial crises, the business in the Middle East as a whole has performed well with the other Emirates and KSA making up for the slow down in Dubai. Same clinic revenue growth is the Middle East was 16% over the corresponding quarter in the previous year. The Kaya Skin business incurred a loss of Rs 3.7 crores during Q3FY10.