{"id":145475,"date":"2023-05-09T07:58:34","date_gmt":"2023-05-09T11:58:34","guid":{"rendered":"https:\/\/44.250.171.167\/?p=145475"},"modified":"2023-05-09T07:58:35","modified_gmt":"2023-05-09T11:58:35","slug":"marico-ltd-q4-fy23-earnings-conference-call-insights","status":"publish","type":"post","link":"https:\/\/alphastreet.com\/india\/marico-ltd-q4-fy23-earnings-conference-call-insights\/","title":{"rendered":"Marico Ltd Q4 FY23 Earnings Conference Call Insights"},"content":{"rendered":"<p><strong>Key highlights from Marico Ltd (MARICO) Q4 FY23 Earnings Concall<\/strong><\/p>\n<p><strong>Management Update:<\/strong><\/p>\n<ul>\n<li>[00:04:21]MARICO said value added hair oils delivered double-digit growth after being subdued for the last five quarters.<\/li>\n<\/ul>\n<ul>\n<li>[00:07:44] MARICO said that domestic volume has stayed well ahead of the sector and is poised to maintain an improving trend in FY24, with revenue growth expected to inch up going forward.<\/li>\n<\/ul>\n<p><strong>Q&amp;A Highlights:<\/strong><\/p>\n<ul>\n<li>[00:12:12] Avi Mehta of Macquarie asked if the GM expansion be more front-ended due to stable input costs and how will it pan out during the year. Pawan Agrawal CFO said MARICO expects that GM expansion will happen from quarter one itself and should expand by 200-250 bps for the full year. MARICO plans to invest it back into some products and expect an operating margin expansion of at least 100 bps.<\/li>\n<\/ul>\n<ul>\n<li>[00:14:39] Vivek Maheshwari at Jefferies asked if the base tailwind will help VAHO and if its numbers will be in double digits for the next three quarters due to a slow base. Saugata Gupta MD said the company expects VAHO to have an improving trend due to favorable factors such as rural contribution, reduced stress in rural consumption, and reduced food and retail inflation. MARICO expects value growth and share gain in VAHO, with slightly premium brands performing well, and note that the category returned to growth in the second half of the quarter.<\/li>\n<\/ul>\n<ul>\n<li>[00:19:05] Vivek Maheshwari from Jefferies asked about the outlook on Saffola for the next year and how the portfolio will shape up in FY24 despite multiple pressures in 4Q. Saugata Gupta MD answered that higher in-home consumption and retail stockpiling during the Omicron peak led to growth in the base quarter. MARICO expects mid to high single-digit growth for Saffola if things remain stable and not volatile, in line with the medium-term aspirations.<\/li>\n<\/ul>\n<ul>\n<li>[00:21:01] Vivek Maheshwari from Jefferies enquired if the growth of Foods and flat to positive growth of HPC is due to lower penetration in Foods or if there is some cyclicality between the two. Saugata Gupta MD replied that that Foods has grown due to urban SKUs, health trends, and in-home consumption, while HPC has been impacted by food inflation and rural SKUs. HPC will recover slowly, but Foods has a slightly better long-term outlook.<\/li>\n<\/ul>\n<ul>\n<li>[00:24:04] Percy Panthaki of IIFL Securities enquired what has driven the 4% CAGR in VAHO for MARICO and were any brands suppressed and have come back to full strength. Saugata Gupta MD said the company has been gaining value share in VAHO due to reduced competition and lower inflation, leading to growth in mid and top brands. MARICO\u2019s focus on value share has led to growth. There is no adjustment between primary and secondary in MARICO.<\/li>\n<\/ul>\n<ul>\n<li>[00:30:48] Kunal Vora from BNP Paribas queried how the mix of MT and e-com change going forward and how the higher contribution affect the medium to longer. Saugata Gupta MD clarified that the growth in MT and e-commerce is attributed to new launches in Foods and digital brand acquisitions, acknowledging that GT has suffered from rural consumption and distribution stress. MARICO plans to improve its GT strategy and are optimistic about growth in that area this year.<\/li>\n<\/ul>\n<ul>\n<li>[00:32:32] Kunal Vora from BNP Paribas asked if there is a higher level of consolidation in MT and e-commerce and if it has any impact on margins. Saugata Gupta MD said there\u2019s need for continuous innovation and being a top player in the market. The cost of sale in e-com and modern trade may be higher, so MARICO plans to focus on premiumizing its portfolio and improving profitability in terms of COGS to offset the increase in cost of sale.<\/li>\n<\/ul>\n<ul>\n<li>[00:33:24] Kunal Vora from BNP Paribas enquired how is the macro situation in Bangladesh and how is the mix of business changing due to currency depreciation and other factors. Saugata Gupta MD said MARICO is a top FMCG player in Bangladesh and has a strong leadership and is replicating its playbook across Vietnam and Middle East. MARICO believes the Bangladesh economy is stable and the growth opportunity is intact.<\/li>\n<\/ul>\n<ul>\n<li>[00:38:54] Sheela Rathi from Morgan Stanley asked about the current distribution reach of the Food business and where it is expected to be in the next 12-24 months. Saugata Gupta MD replied that e-commerce and modern trade availability is almost complete except for some new products, and MARICO is focusing on mass distribution of honey and soya before snacks. MARICO currently has 10,000 food GTM outlets and are aiming to increase that number.<\/li>\n<\/ul>\n<ul>\n<li>[00:40:43] Sheela Rathi from Morgan Stanley asked if new product launches in FY24 will be more on the personal care side or the food side. Saugata Gupta MD clarified that MARICO plans to launch new products in personal care and food, with a more balanced innovation agenda between the two categories. There has been more focus on food in the last 3 years, but MARICO has a premiumization agenda and its premium portfolio is doing well.<\/li>\n<\/ul>\n<ul>\n<li>[00:42:55] Akshen Thakkar from Fidelity asked how is the company is managing the volatility in raw material pricing for the edible oil business and is the focus currently on volume share or margins. Saugata Gupta MD said the approach to Saffola is to maintain a threshold level of margin while being competitive on value to the consumer. MARICO prioritize the protection of margin for Saffola and margin expansion for the Food business. It will not pursue unsustainable volume growth for Saffola.<\/li>\n<\/ul>\n<ul>\n<li>[00:46:35] Tejas Shah at Spark Capital asked about the company\u2019s strategy for dealing with private label aggression from national chains and modern trade, especially with the company pushing many NPDs in food GTM, MT and e-commerce. Saugata Gupta MD said the vulnerability to private label in modern trade depends on the category and company&#8217;s position. Categories with higher private label preference and non-top 2 companies are more vulnerable. Not making supernormal profits and continuous innovation can mitigate the threat.<\/li>\n<\/ul>\n<ul>\n<li>[00:50:16] Ajay Thakur with Anand Rathi asked how the company is seeing new competition in the Parachute Coconut Oil space shaping up. Saugata Gupta MD said that the best way to look at the company\u2019s performance against new competition in the Parachute Coconut Oil space is by looking at MARICO\u2019s market share, which it has not lost over the last 3-4 years.<\/li>\n<\/ul>\n<ul>\n<li>[00:51:40] Ajay Thakur with Anand Rathi enquired if Saffola prices are over-indexed vs. other blends like sunflower oil in the market. Saugata Gupta MD answered that the company\u2019s long-term aspiration is to drive mid-single-digit to high-single-digit volume growth while maintaining a threshold on profitability and not growing at any cost. MARICO believes that as prices come down, people\u2019s willingness to upgrade increases because they look at absolute rupees rather than percentage and Saffola is a strong brand.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Key highlights from Marico Ltd (MARICO) Q4 FY23 Earnings Concall Management Update: [00:04:21]MARICO said value added hair oils delivered double-digit growth after being subdued for the last five quarters. [00:07:44] MARICO said that domestic volume has stayed well ahead of the sector and is poised to maintain an improving trend in FY24, with revenue growth [&hellip;]<\/p>\n","protected":false},"author":1767,"featured_media":125416,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":"","jetpack_publicize_message":"Marico Ltd Q4 FY23 Earnings Conference Call Insights #MARICO #Q4 #FY23 #Earnings #Stocks","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[9825,6351,392],"tags":[9163,10169,9029],"class_list":["post-145475","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-earnings-call-highlights","category-consumer-stocks","category-earnings","tag-consumer-products","tag-earnings","tag-household-personal-products"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg","jetpack_likes_enabled":false,"jetpack-related-posts":[{"id":128935,"url":"https:\/\/alphastreet.com\/india\/marico-ltd-q4-fy22-earnings-conference-call-insights\/","url_meta":{"origin":145475,"position":0},"title":"Marico Ltd Q4 FY22 Earnings Conference Call Insights","author":"Praveen","date":"May 6, 2022","format":false,"excerpt":"https:\/\/youtu.be\/nlaqJNQCJqo Key highlights from Marico Ltd (MARICO) Q4 FY22 Earnings Concall Management Update: MARICO stated that looking forward the near-term demand outlook is uncertain, but is confident of staying ahead of market growth, winning market share and gaining penetration. 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