Marico posts record quarterly revenue on strong Parachute sales

Marico has secured double-digit revenue growth year-on-year to Tk 5 billion in the second quarter through September this year, the highest quarterly revenue since its listing on the secondary market.

The growth, achieved in an adverse macroeconomic situation, was driven by the company's flagship brand Parachute coconut oil and the launch of value-added products in the hair care and skin care categories, according to the company.

Marico launched more than a dozen new products in the year through March this year despite economic and political challenges. Its third manufacturing unitat the National Special Economic Zone in Mirsarai, Chattogram, which went into operation in July 2023, helped boost production by approximately 55 per cent in the year to March.

The India-based multinational company, whose financial year runs from April to March, reported 23 per cent year-on-year sales growth in the July-September quarter this year.

Its top-selling product Parachute coconut oil remained the largest contributor to revenue generation, accounting for more than one-third of total sales. Other hair oil, beauty, health, and men's grooming segments also showcased strong growth momentum.

Compared to revenue, Marico's profit rose marginally - by only 5.5 per cent year-on-year - to Tk 1.54 billion in the quarter through September mainly due to higher input costs and a surge in finance expenses.

Akramul Alam, head of research at Royal Capital, said Marico sustained growth momentum in sales owing to strong consumer trust in its products.

The company's finance costs soared nearly seven times year-on-year to Tk 280 million as lease liabilities increased 23 per cent during the period.

"Higher production costs and increased finance expenses hit the company's bottom-line growth. Otherwise, profit would have been much higher," said Mr Alam after a review of the financial statements published by the company.

The company's cost of sales also increased due to higher input costs, as Marico is largely dependent on imported raw materials.

The cost of sales, which includes all associated costs to manufacture products, stood at Tk 2.51 billion in the second quarter this year, which was 50 per cent of total sales, up from 40 per cent in the same quarter last year.

The company managed to offset some of the costs by optimizing operating expenses through a reduction in selling and distribution expenses.

"Strong fundamentals, brand value, good management and quality of products will help Marico to continue on the growth trajectory," said Mr Alam.

Marico's six-month profit also rose 9 per cent to Tk 3.48 billion in the April-September period this year, while revenue jumped 20 per cent year-on-year to Tk 10.12 billion during the time.

Marico to pay interim dividends

Based on the six-month audited financial statements, Marico has declared a 500 per cent interim cash dividend. So, investors will get Tk 50 per share in cash dividends.

The company had paid a 600 per cent interim cash dividend for the first quarter to June this year. That means Marico will pay Tk 110 per share as cash dividends for the six months to September from earnings per share of Tk 110.52 during the period.

Marico has remained consistent in dividend distribution for the last 16 years since its listing, with annual payouts ranging between 200 per cent and 3,840 per cent, supported by stable earnings and strong cash flows.

Its net operating cash flow per share (NOCFPS) increased to Tk 110.68 for the six months to September this year, from Tk 26.36 in the same period last year, due to higher collection from customers and lower payments to suppliers.

The net asset value (NAV) per share fell to Tk 94.65 in September this year from Tk 239.13 in March this year due to the annual and first interim dividend payouts.

Annual performance

Marico's annual profit jumped 28 per cent year-on-year to Tk 5.91 billion in the year ended March this year, driven by higher sales.

Its annual revenue rose 12 per cent year-on-year to Tk 16.31 billion in the year.

The company paid a remarkable 3,840 per cent cash dividend for the year to March, the highest-ever cash payout since its 2009 listing.

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