Indian FMCG firm, Marico, posted a 23.17% year-on-year rise in net profit at Rs 388 crore for the quarter ended June 30. A net profit of Rs 315 crore was declared last year for the same quarter (April-June). Total revenue generated fell this year from Rs 2166 crore to Rs 1925 crore. 

Q1 FY21Q4 FY20Q1 FY20YoYQoQ
Revenue192514962166-11.12%28.6%
Net Profits38819431523.17%100%
Values in Crore Rupees.

Even though there has been a YoY fall in revenue, net profits for the company has risen sharply, beating all the market estimates. The growth in net profits has majorly because of two reasons; rise in revenue from international business and fall in total expenses. International revenue has risen from Rs 435 crore to Rs 445 crore.

With a high demand in the market, the company decreased its YoY advertising expenses by 37% which led to a higher bottom line. You can find the company’s press release here.

On the other hand, total expenses declined by 7.39 per cent to Rs 1,501 crore. At the end of this quarter, Marico acquired the remaining 55% stake in ZED Lifestyle. Thus, converting it into a wholly-owned subsidiary. “On obtaining the control, the company has re-measured the existing stake at fair value and has recognised the re-measurement gain in the consolidated statement of profit and loss in accordance with Ind AS,” said Marico.

In the past few days, Marico direct competitors Britannia and HUL also declared their Q1 FY21 results. The following graph gives an insight into how the three FMCG companies have fared against each other.

HUL reaffirmed its position as the largest FMCG company in India. Their food & refreshment segment has done really well by posting more than 50% growth in their operating income. Britannia, with the help of proper strategy, was able to launch cheaper and innovative products to meet the high demands of the market. Thus, deriving higher profits.

Even amidst the global pandemic, all three FMCG companies have actually done better than what analyst forecasted. In these tough times where several industries are facing huge losses, these FMCG companies have shown a path of how to curtail unnecessary expenses and invest in the right products so that overall contribution margin can be increased. It will be interesting to see how these companies cope in this quarter as the country is still grappled by COVID-19.

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