Gross margins may remain under pressure this quarter, says Marico

Business

oi-Sunil Fernandes

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Major input costs started to decline after peaking at the start of this quarter, however, gross margins will remain under pressure this quarter due to higher cost inventory consumption and will improve from the second quarter, a Marico said in a trade update.

Marico has a portfolio of brands such as Parachute, Saffola, Saffola FITTIFY Gourmet, Saffola ImmuniVeda, Hair & Care, Parachute Advansed, Nihar Naturals etc.

“Operating margins are expected to see a significant sequential improvement in the first quarter due to higher operating leverage and a trend towards medium-term expectations. However, the operating margin for the quarter will decline sharply year over year, given the exceptionally strong base of 24.3% (due to the rationalization of A&P and other overhead expenses during the quarter of base) and the arithmetic effect (high denominator) of significant price-driven growth. Release.

“We are seeing an improvement in demand trends, as the second wave seems to be receding and the vaccination campaign is progressing steadily. Although there are apprehensions of a third wave, the Company is sufficiently prepared to deal with any disruption in the business environment resulting from the same, given that a large majority of our own members and all resources extended outpatients received the first dose of vaccination. The Company maintains its aspiration for sustainable and profitable growth driven by medium-term volumes, enabled by the reinforcement of the brand equity of its core franchises and new growth engines reaching a critical mass ”, added the company in a communicated.

Article first published: Saturday, July 3, 2021, 10:45 a.m. [IST]


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