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Corporate Overview

STATUTORY REPORTS

FINANCIAL STATEMENTS

Investors

RESILIENT AND MULTIFACETED APPROACH

to deliver value

While the adverse impact of inflation started showing on demand trends in the latter half of FY22, escalating geo-political tensions at the onset of FY23 and the resultant spike in global commodity prices dealt another blow to the overall operating environment. During this challenging period, prudent resource allocation, efficient cash flow management and strategic decision-making allowed us to deliver a resilient performance and prioritise strengthening the building blocks of sustainable and profitable growth.

The FMCG sector witnessed a tepid demand sentiment during the first half of the year with signs of gradual recovery emerging as commodity prices and retail inflation began to moderate over the last 6-9 months. Amidst the short-term volatilities in the macro-environment, the Company stayed true to its strategy of consistently investing towards strengthening the brand equity of its core and newer portfolios. Advertising and Promotion spend in FY23 stood at 8.6% of sales, up 6% on a year-on-year basis. The Company complemented its investments in organic growth by making investments in businesses that are synergistic to its overall diversification strategy. Both, the strategic investment in the healthy breakfast and snacks brand, True Elements, in India and acquisition of the female personal care brands, Purité de Prôvence” and Ôliv, in Vietnam have been conscious steps towards broadening its play in chosen categories in its key growth markets. We expect focused investments towards organic and inorganic growth to accelerate the diversification journey of both the domestic and international businesses and build new levers of sustainable growth.

During the year, the Company incurred capital expenditure of H 182 Crores for capacity expansion and maintenance of existing manufacturing facilities. Cash generated from operations, at H 1,419 Crores in FY23, remained the primary source of liquidity. The institutionalized cost management program, MarVal, continued to support the Company’s strategic objectives amidst challenging demand conditions and input cost volatility during the year.

The Company has a comprehensive risk management framework, which aids in execution of its long-ter m strategy as it integrates the possible risks and mitigation initiatives in business planning processes. 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 H 1,301 Crores. 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 following a prudent cash flow management approach. Moreover, in case any exigencies arise in future af fecting the liquidity position, the Company would be in a comfor table position to borrow capital given that it enjoys AAA credit rating and maintains a strong balance sheet. As on March 31, 2023, its Debt/EBITDA was at a comfortable level of 0.26x.

The company continued to report healthy capital efficiency ratios during the year. In FY23, Return on Capital Employed (ROCE) was at 44.0% and Return on Equity (ROE) was at 36.4%.

Financial Performance

In FY23, Marico achieved a consolidated turnover of H 9,764 Crores, up 3% YoY, and recurring consolidated PAT of H 1,280 Crores, up 4% YoY. The operating margin stood at 18.5%, up 87 bps.

A detailed discussion on the financial and operational performance in FY23 is available in the Management Discussion and Analysis section of the Report.

© 2023 Marico