India’s Marico beats profit view on steady demand for packaged oil

Indian consumer goods maker Marico reported a first-quarter profit on Monday that topped analyst expectations, benefiting from steady demand for its cooking and hair oils.

Its consolidated net profit rose nearly 9% to 5.04 billion rupees ($57.51 million) in the April-June quarter, beating analysts’ expectations of 4.86 billion rupees, according to data compiled by LSEG.

Domestic volumes rose 9%, led primarily by its Saffola brand cooking oils and hair oils.

Packaged cooking oil, a staple in Indian households, has been largely resistant to a slowdown in sales that has dented the margins of other consumer conglomerates which have a broad portfolio of personal care and household items.

Marico has also passed on the benefits of the recent import duty reduction on edible crude oils used to refine its ‘Saffola’ cooking oils, to its customers.

Saffola oil volumes rose in mid-single digits in the first quarter, while revenue in the segment rose 28%, Marico said.

Volumes of Marico’s ‘Parachute’ brand of coconut oil rose about 1% and revenue grew 31%, as price hikes undertaken to mitigate commodity cost inflation padded the topline but crimped demand.

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Together, they make up about half of Marico’s revenue in India.

Marico also joined companies such as Dabur and Hindustan Unilever in highlighting improving demand conditions in urban areas, after several quarters of a spending slowdown amid the high cost of living.

Its overall revenue rose 23.3% in the first quarter, to 32.59 billion rupees, coming in above analysts’ average estimate of 32.1 billion rupees.

Shares of Marico were up 1.87%.

Peer AWL Agri Business, previously known as Adani Wilmar, reported a nearly 25% fall in first quarter profit in July, as higher prices of branded palm oil led consumers to opt for cheaper alternatives.