Marico shares fall 5% post Q2 business update
Marico fell nearly 5% to Rs 543.9 in Thursday's trade on BSE after the September quarter business update by the Indian consumer products maker disappointed investors.
Marico's domestic volumes grew in a low single-digit percentage range over the previous year, dragged by a persisting weakness in rural demand.
«During the quarter, demand trends largely mirrored the trends observed in the preceding quarter,» the company said in an exchange filing.
Rising food prices and below-normal rainfall distribution in some regions impeded the anticipated recovery in rural demand, according to the company.
The packaged consumer goods maker, however, is hopeful of a recovery in consumption trends, particularly in rural areas, in the second half of the fiscal. This is thanks to retail inflation levels staying within the Reserve Bank of India’s target range, a hike in MSPs, a healthy sowing season, easing liquidity pressures, and government spending.
The company's domestic volumes grew 3% in the preceding quarter.
Subdued rural demand, coupled with a move to cut prices of its Saffola edible oil, also impacted the company's revenue in the September quarter.
Additionally, the company said that currency depreciation in certain overseas markets negatively impacted the reported INR growth of the international business.
The firm experienced low single-digit year-on-year growth in domestic volumes for its known products like Parachute coconut oil and Saffola Edible Oils.
The company's international businesses logged a double-digit constant currency growth.
The company anticipates a gross margin expansion for the quarter since primary input costs, including copra and edible oil prices, remained favourable. However, crude derivatives
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