(Reuters) – Indian consumer goods firm Marico on Friday estimated its consolidated quarterly revenue will rise in the mid-teen percentage range, boosted by improving rural consumption and higher demand for its Parachute and Saffola brands of oils.
Cooking oil has largely withstood a broader slowdown among branded consumer goods due to its essential nature, according to analysts, even as brands raised prices in recent months to make up for higher ingredient costs.
Analysts are expecting a 11.2% rise in consolidated revenue in the quarter, as per LSEG data.
The Parachute coconut oil brand has been “resilient” in terms of revenue, while Saffola has “held firm in volume terms”, the company said.
However, Marico said it expects a higher-than-anticipated gross margin contraction on a year-on-year basis and modest operating profit growth for the third quarter ended Dec. 31 due to higher raw materials and expansion costs.
The update from Marico comes two months after it tipped its consolidated revenue to grow year-on-year in the double-digit percentage range between October and March.
However, sales in large cities are under pressure as consumers cut back on spending due to high costs of living. Marico CEO Saugata Gupta told Reuters in November that urban consumption would take at least six months to revive.
The urban segment accounted for about 30% of its domestic sales, as of June-end.
Marico’s international business, which accounts for a quarter of its overall revenue, will report a mid-teen constant currency growth in revenue in the third quarter, the company said.
Gupta in November had said Marico was looking to expand in the United States and East Africa as well as enter Indonesia.
In 2024, Marico shares rose 16.6%, compared with a 0.3% fall in the Nifty consumer goods index.
(Reporting by Praveen Paramasivam and Meenakshi Maidas; Editing by Janane Venkatraman)
