India's Marico beats Q2 profit estimates on price hikes

Indian consumer goods maker Marico reported second-quarter profit well above market estimates on Tuesday, propped up by price hikes undertaken to offset higher raw material prices, reports Reuters.

The company reported a near-20 per cent rise in consolidated net profit to 4.23 billion rupees ($50.3 million) for the three months ended Sept. 30.

Analysts were expecting a profit of 3.86 billion rupees, according to data compiled by LSEG.

To offset a 25 per cent year-on-year increase in prices of copra, the main raw material used to produce coconut oil, Marico raised prices of the product in India.

The price hikes included a 15 per cent increase in its edible oil segment.

"Pricing growth for the sector turned positive on a year-on-year basis as brands effected price increases in response to rising commodity prices," Marico said in a statement.

It said its gross margin expanded by 30 basis points from a year earlier as healthy margin improvements more than made up for rise in input costs.

Sales volumes of "Parachute" coconut oils - its biggest segment by domestic revenue - rose 4 per cent, while revenue grew 10 per cent.

Meanwhile, sales volume of Marico's "Saffola" brand of edible oils were flat year-on-year, while revenue rose 2 per cent due to price hikes.

Marico's revenue from operations rose 7.6 per cent to 26.64 billion rupees.

The company forecast domestic revenue growth in double digit percentages in the second half of the fiscal year, and said it expects international business to maintain constant currency growth in double-digit percentages.