Marico’s profit up 17.8% in Jul-Sep
Marico, the maker of the much-loved Parachute Coconut Oil, saw its profit soar 17.8 per cent year-on-year to Tk 78.9 crore between July and September as demand returned of the Indian fast-moving consumer goods company’s personal grooming products with the reopening of the economy from June.
During the quarter, the Bangladesh subsidiary of the Mumbai-based company performed better than its parent, whose profit was up 8 per cent to Rs 273 crore.
Marico Bangladesh -- whose portfolio comprises largely of personal grooming products ranging from hair oil to hair dye, body lotion to baby care, men’s toiletries to cooking oil -- logged in sales of Tk 290 crore during the quarter, up 16.7 per cent from a year earlier.
The Indian FMCG company had its eye on the ball at all times: given the heightened hand hygiene practice inflicted by the global coronavirus pandemic, which firmly took root in March, the company rolled out a hand sanitiser and a hand wash earlier in April in record time.
Then in June, it supplemented its hygiene range, called the MedikerSafeLife, by introducing a cleaning solution that removes all the germs, bacteria, chemicals, waxes and soil present on the surface of fruits and vegetables without leaving any residue, aftertaste or smell.
The hygiene product launches coupled with the popularity of its hair care products took Marico’s profit in the first half of the financial year, which runs from April to March, to Tk 178.5 crore, up 17.6 per cent year-on-year.
The significant rise in earnings the second quarter, shaking off the effects of the pandemic, was due to the country opening up and economic activities returning to normal, said Christabel Randolph, director of Legal and Corporate Affairs of Marico Bangladesh, which account for 49 per cent of its company’s international business.
In Bangladesh, the countrywide shutdown was lifted on May 30 after two-and-a-half months.
The growth in sales in Marico’s second quarter (July-September) were driven by the hair oil category, she said.
The sales of its flagship product, the Parachute Coconut Oil -- which is the leader in the $41.3 million hair oil market with an 80 per cent share -- increased 8 per cent during the quarter, said Marico’s parent company in its second-quarter earnings statement.
But its value-added hair oils, particularly Parachute AdvansedBeliphool, Parachute AdvansedExtraCare and ParchuteAdvansed Aloe Vera, performed well, according to Randolph, also the company secretary of Marico Bangladesh.
Sales of the new product launches in the first half of the 2020-21 financial year -- which also included a shampoo -- also showed “good momentum”, she said.
Given the tremendous demand for its product, Marico last month announced its plan to invest Tk 227 crore to set up a new plant in the Mirsarai Economic Zone to supplant its existing production facilities in Gazipur and other manufacturing contracts.
Market too has taken note of Marico’s great run.
The share price of Marico, which was listed on the Dhaka Stock Exchange in 2009, has been on an upward trajectory in the past two years. For instance, it started the quarter at Tk 1,562.5 and yesterday, it closed at Tk 2,149.4.
The company declared a 200 per cent interim cash dividend for the first half of the financial year.
It gave a whooping 950 per cent cash dividend for its last financial year, up from 650 per cent in the 2018-19 financial year.
Seeing that the Indian FMCG, which has been in the country since 1999, is comfortably part last year’s profit level at this point, its shareholders can brace themselves for an even bigger payout for this financial year.