Brands
Pruned Ad expenses among Marico’s tightening measures bring higher PAT in Q3-2014
BENGALURU: Indian consumer products and services company in the global beauty and wellness space, Marico Limited (Marfico) reported 27.87 per cent growth in PAT to Rs 135.37 crore in Q3-2014 from Rs 105.87 crore in Q2-2014 and 32.33 per cent from the Rs 102.29 crore in Q3-2013.
The company has been tightening its operations, as seems evident from the figures reported by it for the current quarter. Changes in depreciation and amortization calculation method since FY-2013 that result in a lower figure as compared to the older method, reduction in employee benefit, pruning of advertising and sales promotion expense (Ad and sales promo), lower finance cost, lower percentage of ‘other expense’ in relation to its revenue are some of the changes that have been reported by Marico.
Let us look as the figures reported by Marico vis-?-vis Ad and sales promo expense during Q3-2014
Marico spent Rs 134.08 crore towards Ad and sales promo in Q3-2014, (-15.94) per cent lower than the Rs 157.82 crore in the corresponding quarter of last year and (-0.85) per cent lower than the Rs 135.22 crore in Q2-2014. During the nine month period ended 31 December 2013, Marico spent Rs 439.27 crore on this account, which was (-6.99) per cent lower than the Rs 472.26 crore spent during the corresponding nine month period of last year. During FY 2013, Marico spent Rs 597.94 crore towards Ad and sales promo.
In terms of percentage of operating revenue (national and international), Marico’s Ad and sales promo expense has trended downwards. The figures for Ad and sales promo expense are: 11.19 per cent of Operating revenue of Rs 1198.35 crore in Q3-2014; it was 13.56 per cent of Operating revenue of Rs 1163.99 crore in Q3-2013; it was 12.12 per cent of Operating revenue of Rs 1,115.36 crore in Q2-2014; it was 12.18 per cent of Operating revenue of Rs 3606.37 crore during the nine month period ended 31 December 2013; and 13.17 per cent of Rs 3587.09 crore during the nine month period ended 31 December 2012. For FY 2013, Marico’s Ad and sales promo expense was 13.04 per cent of Operating revenue of Rs 4,584.35 crore.
In terms of percentage of Total expense, Marico’s Ad and sales promo expense during Q3-2014 was 13.15 per cent of Total expense of Rs 1,019.58 crore; During Q3-2013, it was 16.33 per cent of total expense of Rs 1,022.89 crore; During Q2-2014, it was 15.44 per cent of Rs 966.69 crore; During the nine month period ended 31 December 2013, Marico’s Ad and sales promo expense was 14.28 per cent of Total expense of Rs 3,076.05 crore as compared to the 14.97 per cent of Total expense of Rs 3,154.56 crore during the corresponding nine month period of FY 2013. During FY 2013, Marico’s Ad and sales promo expense was 14.74 per cent of Total expense of Rs 4,057.02 crore.
Marico says that its India operations FMCG business, which contributes 76 per cent to group revenue, grew nine per cent in terms of value and three per cent in terms of volume during Q3-2014, indicating a better price realisation during the quarter. During the nine month period ended 31 December 2013, (YTD) Marico’s Indian FMCG business grew six per cent in both value and volume.
Marico claims a premier position on key parameters in market share (on basis of 12 month moving average total or MAT) for many of its branded products. It claims a market share of 56 per cent in India for its coconut oil under the brands Parachute and Nihar. For its edible refined oil brand Saffola, the company claims a market share of 57 per cent and no. 1 position.
Marico says that its hair oil brands Parachute Advansed, Nihar, Hair & Care have a market share of 28 per cent and are ranked 1 in India. Its claims the 5th position in India with a market share of five per cent for its deodorant brands Set Wet and Zatak.
Marico’s largest branded product with 24 per cent contribution to group revenue, Parachute Coconut oil in rigid packs showed growth of six per cent in value and two per cent in volume. YTD, this product showed a decline in value by (-one) per cent, while showing a volume growth of two per cent.
Marico’s value added Hair Oils portfolio with brands like Parachute Advansed, Nihar, Hair & Care and having 17 per cent contribution to group revenue grew 16 per cent in value and 8 per cent in volume during Q3-2014. YTD, it grew 17 per cent in terms of value and 13 per cent in terms of volume.
Its refined edible oil brand Saffola with 16 per cent contribution to group revenue grew seven per cent in terms of value and nine per cent in terms of volume. YTD, Saffola grew five per cent in terms of value and nine per cent in terms of volume.
The company has raised the prices across all products in December 2013.
Marico Group CEO Saugta Gupta said, “We believe that the soft consumption environment has bottomed out and the performance of the Company will pick up steadily going forward. In order to make the Company future ready, we are investing significantly on go-to-market transformation, cost management, innovation and analytics project. The Company will start reaping the benefits of these capability building initiatives from FY15 onwards. We will also experience greater synergies in product portfolio and talent mobility across different geographies in the coming year.”
Marico Group CFO Milind Sarwate said “Marico’s FMCG Business has managed to grow despite the challenges of the economic slowdown in India and instability in some of our overseas markets. The basics of our business are however robust. The Kaya demerger is now effective with Bombay High Court approval. We now expect shares in Marico Kaya Enterprises Limited to list in April 2014.”
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Brands
HSBC Mutual Fund launches Redhex SIF for specialised investing
SEBI-approved fund offers flexible strategies with Rs 10 lakh minimum entry.
MUMBAI: When markets get complex, investors are increasingly looking for sharper tools and HSBC Mutual Fund is betting on exactly that. The asset manager has introduced RedHex SIF, its dedicated Specialized Investment Fund (SIF) platform in India, aimed at investors seeking more targeted, outcome-driven strategies without stepping outside the familiar mutual fund ecosystem. Structured under SEBI’s regulatory framework, Redhex SIF is designed to offer greater portfolio flexibility than traditional mutual funds while retaining core benefits such as transparency, governance and ease of access. The idea is to bridge the gap between conventional investing and more sophisticated, strategy-led approaches.
The platform comes with a minimum investment threshold of Rs 10 lakh, positioning it squarely for experienced investors, including HNIs and institutional participants. In return, it offers focused investment strategies built around specific themes, enabling more precise portfolio construction.
At its core, the proposition leans on balance flexibility without losing discipline. While investors gain access to differentiated opportunities, the structure maintains a strong emphasis on risk management and portfolio stability, reflecting a growing demand for controlled exposure in volatile markets.
The launch also signals a broader shift in investor expectations. As market cycles become more dynamic, alpha is increasingly tied to adaptability and nuanced strategy rather than broad-based allocation alone. Platforms like Redhex SIF attempt to respond to this shift by offering more tailored solutions within a regulated framework.
For HSBC Mutual Fund, the move expands its product suite while tapping into a segment that is moving beyond vanilla offerings in search of sharper outcomes.
In short, as investing evolves from one-size-fits-all to made-to-measure, Redhex SIF positions itself as a toolkit for those looking to play the market with a bit more precision and a lot more intent.
