The year was characterised by unprecedented challenges on all fronts, as we contended with rising input costs, sharp volatility in business conditions, new COVID variants, geopolitical tensions and a demand slowdown. In these times, dynamic financial management, strategic clarity, a strong cost management programme and calibrated pricing actions helped protect our business model and strengthen our consumer franchise. As a result, we were able to deliver competitive and profitable growth during the year.

Despite transient cost headwinds, the Company invested in brand building of its core and new portfolios, including Digital-first brands. Advertising and Promotion spend, at 8.4% of sales, was up 14%, as we prioritised building long-term brand equity over short-term margin protection.

During the year, the Company incurred capital expenditure of ` 132 Crore for capacity expansion and maintenance of existing manufacturing facilities. Cash generated from operations, at ` 1,016 Crore in FY22, remained the primary source of liquidity. The Company also continued to accrue savings from the institutionalised cost management initiatives across domestic and overseas operations, which helped reduce the impact of sharp input cost inflation during the year.

We continued to integrate the possible risks and their mitigation in our business planning processes as a part of the organisation-wide risk management program. The Company drove profitable operations and enjoyed a comfortable net cash surplus situation during the year. Net surplus at the end of the year was at ` 956 Crore. While current borrowings are mainly for working capital requirements, the Company actively explores opportunities to optimise borrowing costs and maximise yield on investments while maintaining conservative guardrails on safety, liquidity and returns. The Company ensures adequate access to funding and leverages the surplus to meet its operating needs and strategic objectives while managing its cash flows in a cost-efficient manner. Moreover, in case any exigencies arise in future affecting the liquidity position, the Company would be in a comfortable position to borrow capital given that it enjoys AAA credit rating and maintain a strong balance sheet. As on March 31, 2022, its Debt/EBITDA was extremely comfortable at 0.20x.

Owing to the aforementioned approach, there was a further improvement in the capital efficiency ratios during the year. Return on Capital Employed (ROCE) improved from 44.3% to 44.8% and Return on Equity (ROE) was up from 37.1% to 37.3%.

Financial Performance

In FY22, Marico achieved a consolidated turnover of ` 9,512 Crore, up 18% y-o-y, and consolidated PAT (excluding one-offs) of ` 1,230 Crore, up 6% y-o-y. The operating margin stood at 17.8%. The Company’s dividend payout ratio for the year was at 97%, as a result of the healthy operating performance and stable financial position.

A detailed discussion on the financial and operational performance in FY22 is available in the Management Discussion and Analysis section of the Report.

Key Performance Indicators

Key Financial Capital Inputs