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Marico shares rise after September quarter business update

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Cooking oil maker Marico’s shares rose 5.7 per cent to hit a 52-week high at Rs 590 after the company gave its business update for the second quarter of the current fiscal. Marico’s revenue growth was in the low twenties with volume growth near double digits on a two-year compound annual growth rate (CAGR) basis, the company said in the quarterly update.

“Parachute Coconut Oil delivered in line with medium-term aspirations, while Value Added Hair Oils posted double-digit volume growth,” Marico said.

Its edible oil business – Saffola Edible Oils had a sluggish quarter, mainly due to volatility in edible oil prices, which led to a contraction in trade and partly to domestic consumption. Foods business, on the other hand, continued to grow rapidly and is poised to reach Rs 500 crore in revenue this year, Marico said.

“International trade delivered double-digit constant currency growth as we saw positive trends in all markets except Vietnam. Vietnam, where a large portion of our portfolio is discretionary in nature, was hit by a severe COVID surge and stringent lockdown restrictions . ,” said the Mumbai-based company.

“Among key inputs, copra prices further improved, crude remained firm, while edible oil prices remained higher. Gross margins are expected to improve marginally from the previous quarter, but on a year-on-year basis. There will be pressure on input costs much higher than last year,” Marico said.

So far this year, Marico’s shares have risen 47 per cent against a 25 per cent gain in the Sensex.

As of 1:42 pm, Marico shares were trading 2.35 per cent higher at Rs 571, compared to the Sensex’s 0.4 per cent lower.

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