Brands
Marico Q4-2014 Ad spends down 9 per cent; 6 per cent down in FY-2014
BENGALURU: Indian consumer products in beauty and wellness space company Marico spent (-9.08) per cent less at Rs 121.91 crore (11.38 per cent of Operating Income or Op Inc) in Q4-2014 towards advertisement and sales promotion (Ad & SP Exp) as compared to the Rs 134.08 crore (11.17 per cent of Op Inc) in Q3-2014. Further, Marico’s Ad & SP Exp in Q4-2014 was also lower by (-3.0) per cent as compared to the Rs 125.68 crore (12.59 per cent of Op Inc) in the year ago quarter Q4-2013.
During FY-2014, the company’s Ad & SP Exp was down (-6.15) per cent at Rs 561.17 crore (11.97 per cent of Op Inc) as compared to the Rs 597.94 crore (13.01 per cent of Op Inc) in FY-2013. The company’s average Ad & Sp Exp as percentage of Op Inc over nine quarters starting Q4-2012 until Q4-2014 is 12.48 per cent, and the current year’s Ad & SP Exp throughout the year as well in Q4-2014 are lower than that average.
Notes: 100,00,000=100 Lakhs = 1 crore
Marico’s Op Inc for Q4-2014 was (-10.71) per cent lower at Rs 1072.06 crore as compared to the Rs 1200.69 crore in Q3-2014. Y-o-y, Op Inc for Q4-2014 was 7.36 per cent more than the Rs 998.59 crore in Q4-2014.
Please refer to Fig 1 and Fig 1A below:
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In line with the consumer goods industry trends, the company’s PAT in Q4-2014 has dropped by (-34.42) per cent to Rs 88.77 crore from Rs 135.37 crore in Q3-2014. However, y-o-y, Marico’s PAT in Q4-2014 was 5.85 per cent more than the Rs 83.86 crore in Q4-2013.
Across the nine quarters in question, PAT trend is upwards, both in terms of absolute rupee value and as percentage of Op Inc. PAT as per cent of Op Rev also trends upwards between three financial years staring FY-2012 to FY-2014. Please refer to Fig 2 and Fig 2A below.
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Marico says that its business has shown steady recovery in volume growths with sustained improvements in market shares. In India, due to the weak demand environment, the growth rates of various segments have come down. This has impacted the company’s growth rates as well.
The company entered the Hair Colour category by introducing Livon Conditioning Cream Colour. The initial retailer and consumer feedback across the board has been positive.
To commemorate 25 years since incorporation, the company has declared a one-time Silver Jubilee Third Interim Dividend of 175 per cent (Rs 1.75 per share) on the equity share capital of Rs 64.48 crore at the meeting of its Board of Directors held in March 2014.
Marico Managing Director & CEO Saugata Gupta said, “Despite the challenges in the environment during FY1-2014, it has been a satisfying year with Marico’s brands gaining shares across most of the portfolio. In Q4 we have been able to get back to healthy levels of growth in key categories and expect to see a gradual increase in momentum in the coming quarters.
Here is what the company has to say about its various products and brands:
Parachute coconut oil in rigid packs (the focus part of the Parachute portfolio) recorded a volume growth of about 10 per cent during the quarter. Q4FY14 has shown a recovery in volume growth from an abnormally low growth in Q3FY14. During the 12 month period ended March 2014, Parachute along with Nihar maintained its market share at 56 per cent.
The Saffola refined edible oils franchise grew by about 11 per cent in volume terms during Q4FY14 as compared to Q4FY13, reporting a continuous improvement in performance. The brand has been able to reverse a softer performance in 2012-13 and accelerate in the second half of the year based on its effective equity building communication. The brand maintained its leadership position in the super premium refined edible oils segment with a market share of about 55 per cent during the 12 months ended March 2014.
In the breakfast cereals, Saffola Oats has increased its market share by 24 bps to 14 per cent and has retained its no two position. Saffola Oats crossed Rs 50 crore ($ 8 million) landmark in top line during the year under review. The company expects to continue the robust growth in Oats.
Marico’s hair oil brands (Parachute Advansed, Nihar Naturals and Hair & Care) grew by 5 per cent in volume terms during Q4FY14 over Q4-2013. Nihar Shanti Amla continues to gain market share and achieved a volume market share of about 30 per cent for the 12 months ended March 2014 in the Amla hair oils category (MAT FY13: 25 per cent). Niha Shanti Amla is now a Rs 250 crore ($ 40 million) brand.
Due to the challenging environment, the body lotion category growth rate has fallen to single digit. Parachure Advansed Body Lotion has maintained its no three position with a market share of six per cent. The company expects the brand to be back on track next year.
The Company says that it launched India’s first unique multi-dimensional ‘spray-on’ body lotion during the quarter. The variant has been launched in a 100ml SKU with an introductory price ofRs. 99.
The acquired portfolio of youth brands grew by 16 per cent during the year over FY13. Due to inflationary trend and restricted spends on discretionary products, the category growth rates of Post Wash Serums, Hair Gels/Creams and Deodorants have come off considerably. This coupled with a high base in Q4FY13 (due to re-launch of Zatak) has led to a flat performance of the portfolio in Q4-2014.
Set Wet and Zatak increased its market share marginally in the deodorants segment to five per cent for the 12 months ended March 2014, in this crowded category. In February, Set Wet launched a new variant Set Wet Infinity, a non-aerosol perfume spray with ‘no-gas’ formulation. The launch will be supported by an extensive media campaign during IPL7. Set Wet (Deodorants and Gels) is now a Rs 100 crore ($ 17 million) brand with a strong equity and growing consumer franchise.
This youth portfolio will also witness a much higher interaction with overseas portfolio thereby leveraging scale and innovation synergies.
Sales in Modern Trade (nine per cent of the domestic turnover) continued its good run and grew by 16 per cent in
Q4-2014 led by Saffola and coconut oil.
Marico’s rural sales continue to clock a faster pace of growth than its urban sales. The continued focus on distribution expansion in rural markets has pushed FY-2014 rural sales to more than 30 per cent of total Indian FMCG sales.
Brands
Raj Cooling Systems launches Agreyas appliances brand
Emraan Hashmi named brand ambassador for consumer appliance push.
MUMBAI: A company known for cooling solutions is now heating up its ambitions in the home appliances market. Raj Cooling Systems Pvt. Ltd. has launched a new consumer appliances brand, Agreyas, marking its entry into India’s rapidly expanding home appliances sector valued at more than Rs 1.5 lakh crore. The move represents a strategic diversification for the company, which has traditionally focused on cooling solutions for residential, commercial and industrial applications. Through Agreyas, the firm plans to tap into growing consumer demand for energy efficient and technology driven household appliances.
To build brand visibility, Agreyas has appointed Emraan Hashmi as its brand ambassador. The campaign has been developed under the banner of Zoommantra Productions, with actor and filmmaker Rohit Roy contributing to the creative direction.
The brand’s initial portfolio will include mid premium air conditioners, washing machines, geysers and other white goods designed to cater to modern Indian households seeking efficient and reliable appliances.
Raj Cooling Systems, founder and chairman Kalpesh Ramoliya said the launch aligns with the company’s broader expansion plans.
“The launch of Agreyas is in line with our vision to build a strong presence in India’s consumer electronics and home appliances market. The brand has been developed as a standalone identity to meet the evolving needs of Indian consumers,” he said.
Hashmi said the collaboration comes at a time when Indian buyers are increasingly looking for innovative and functional home solutions.
“I’m looking forward to working with Agreyas at a time when consumers are seeking more innovative and efficient home products. The brand reflects changing consumer behaviour around functionality, innovation and ease of use,” he said.
Raj Cooling Systems plans to invest around 10 million dollars in developing the brand, with an additional 5 million dollars earmarked over the next three to five years for product development and distribution expansion.
Agreyas will follow a multi channel distribution approach, selling through online platforms, retail outlets and dealer networks aimed at both urban and semi urban markets across India.
With the launch, the company is positioning Agreyas as a standalone consumer facing brand while continuing to leverage its existing manufacturing, engineering and research capabilities built through its core cooling solutions business.
