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<ul><li>In Q4FY21, Marico’s Revenue from Operations grew by 34% YoY to Rs 2,012 crore.</li><li>The company witnessed strong momentum in each of the core portfolios of the India business while steadily strengthening its play in Foods through innovation.</li></ul>FMCG Giant Marico has released its financial statement for Q4FY21. Its advertising and sales promotion grew by 35% YoY as the company invested aggressively mainly on core franchises and the Foods innovations, while continuing to drive spend rationalization and channelize investment towards growing franchises. Saugata Gupta, MD and CEO commented, “With the pandemic in India taking a severe turn, the year has ended on a rather sombre note. Marico stands united and committed to making a difference in the lives of all our stakeholders and the entire community at large, hoping that we overcome these extremely difficult times at the earliest and emerge stronger from it. It is the tremendous grit and fighting spirit of our people that has allowed both the domestic and international businesses to rebound impactfully on a year-on year basis. We expect the India business to remain resilient amidst uncertainty in the near term and see through the transient spike in input costs, while the stability in the International business is also reassuring. Over the medium term, the Company will continue to prioritise maintaining volume-driven growth momentum and franchise expansion even in times of temporary cost pressures by focusing on growing the core, aggressive foods diversification, executional excellence and investment behind capability and brand building.” In FY21, Marico’s Revenue from Operations grew by 10% YoY to INR 8,048 cr. (USD 1.1 billion) backed by volume growth of 7% in the domestic business and constant currency growth of 7% in the international business. EBITDA was at INR 1,591 cr., up 8% YoY and PAT excluding one-offs, was at INR 1,162 cr., up 11% YoY. In Q4FY21, Revenue from Operations grew by 34% YoY to INR 2,012 crores (USD 276 million) backed by robust volume growth of 25% in the domestic business and constant currency growth of 23% in the international business. The company witnessed strong momentum in each of the core portfolios of the India business while steadily strengthening its play in Foods through innovation. Rural continued to lead the way in traditional trade, growing at 1.8x of urban. Ec0m (now 8% of domestic business) and CSD also fared well, while Modern Trade dipped due to pantry loading in the base quarter. Gross margin was down 517 bps owing to the severe input cost pressure, as pricing interventions in the core portfolios were not commensurate to the inflation. Advertising &amp; Sales Promotion grew by 35% YoY as the Company invested aggressively mainly on core franchises and the Foods innovations. EBITDA was up 13% YoY, as tight cost controls and operating leverage kicked in to reduce the impact on EBITDA margins to 300 bps. PAT excluding one-offs was up 17% YoY. Reported PAT was up 13%. As per the company's statement, Saffola Honey has been scaling up faster than their launch expectations. The brand exited FY21 just short of a double-digit market share in key Modern Trade chains and has garnered 25%+ market share in E-Commerce. The brand is on course to touch revenues of INR 100 cr. in the coming year. Expanding its presence in Foods, the Company launched Saffola Oodles, 5-minute ring-shaped noodles, containing no refined flour and with the goodness of whole grain oats, real vegetables and semolina. The company holds its medium term aspiration of delivering 8-10% domestic volume growth and 13-15% revenue growth. The Company would be comfortable maintaining its threshold operating margin of 19% plus over the medium term.

Marico's profit up by 14.1% to Rs 227 crore in Q4FY21; advertising and sales promotion sees a growth of 35% YoY

<ul><li>Despite a slowdown in 2019, Marico continued to hold on to market share and refrained from cutting down its marketing budgets.</li><li>Its focus on constantly innovating and coming up with premium products while keeping the consumer at the core of all its strategies helped the brand brave the slow times.</li><li>Koshy George, Chief Marketing Officer, Marico Limited walked us through the factors that helped the brand put up a good show in a difficult year, and its marketing game-plan for the year ahead. </li></ul>
 <div type="Video" msid="73255971" hostid="261" title="Koshy George, CMO, Marico Limited walks us through Marico's performance in 2019 and the key areas of focus in 2020" thumbUrl="https://denmark.timesinternet.in/cmslite/api/app/images.jpg?msid=73255971"></div>




It's been just about a year since Koshy George came on board as the Chief Marketing Officer at Marico Limited. While 2019 wasn't particularly an easy year for the overall industry, thanks to the economic slowdown, Marico’s core brands have managed to hold on to their leadership positions. The reason for this growth is perhaps its strong marketing game and the fact that the brand has been focusing on innovation and premiumisation, to solve consumer pain points. Before Marico, George spent close to 15 years in Hindustan Unilever, working on prominent brands like Lifebuoy, Pears, Dove, Lux, Lifebuoy and Sunlight, amongst others. In Marico, George is leading the company’s core hair nourishment brands that include Parachute Advansed, Nihar, Hair &amp; Care, Shanti Amla and Livon, among other brands. For a while now, premiumisation has been helping bridge the gap between what once could be termed as luxury products and products with a more mass appeal. It is also making products more appealing to millennials and a younger set of audience, that is ready to shell out some extra bucks, to get a better consumer experience. Despite being a legacy brand, Marico identified this as a growth area and has been focusing on innovating and coming up with premium products under its portfolio. Why premiumisation will continue to be critical The last year saw the economy witness a slowdown that led to muted growth across industries and FMCG wasn’t untouched by its effects. The effects were most starkly felt in rural markets, which witnessed a substantial dip in sales. However, despite the strong headwinds, Marico succeeded in gaining significant market share in the segments they play in. Its core brands like Parachute and Shanti Amla continued to perform well. “There is a headwind coming in, in terms of the growth of the overall categories shrinking. Competitively, we are doing well, our brands are looking very strong. However, what we need to realize is that the slowdown is here to continue and in such a scenario, how do re-tweak our strategies and get people back to help grow the category,” says George. In such a scenario, what does a marketer do, to protect a brand from being impacted adversely? The answer, George shares, lies in ensuring that consumers get better value from their products. “One of the things we are looking at differently is how do we pass on more value to our consumers? There is obviously some price or promotions we have initiated in the market that ensure that people get the right value at a time like this. Moreover, if you look at the other spectrum, there are channels like modern trade and e-commerce that continue to grow and premiumise. So at that end of the spectrum, we are looking at getting more premium innovations to drive growth there. So we are looking at very different approaches in different parts of the market,” he explains. Livon and its growth story When it comes to the hair serum category, Marico had a clear first-movers advantage when it launched Livon. Years after its launch, despite the category getting cluttered with the entry of a lot of national and international brands, Livon has managed to hold its own. Today, the brand holds about 70% of the serum category. Speaking about Livon’s growth trajectory and the factors that have helped the brand hold on to its leadership position, George says, “Livon has done fabulously well and has stepped up growth in the last few years. For Livon, the core task continues to be driving relevance and building the category, considering it’s a very different format. Most of India is still rooted to using oils, so it’s our job to create the market and educate people on when a serum is used and that continues to be our number one focus. So we have got the product at accessible price points. We also continue to work on upgradations while promoting it around our brand proposition of salon finish hair. Thirdly, we are bringing about a lot of innovation. We now have Livon Colour Protect. We are now looking at opening at sub-segments and targeting modern trade and e-commerce more sharply.” George also says that being the market leader gives them the added responsibility of helping the category grow, which is why he is unfazed by the ever-increasing competition in the category. “Competition coming in is always good because it grows the category faster. We are quite sure that we have a pole position building the category and hence it will always work for us. The trick is to keep innovating and that we continue to drive category upgradation,” he adds. Getting the right marketing mix While slowdowns usually directly impact advertising and marketing budgets, Marico refrained from cutting down on their budgets. Explaining why, George says, “We haven’t really tempered down on our marketing investment because we believe that once you start investing on brands, there will be cycles where the markets fluctuate, but if we continue to invest, we will get the benefits in the long-run.” While TV continues to be Marico’s lead medium, Digital has been witnessing a steady growth, in terms of marketing spends. In the last 2-3 years, the brands spends on Digital has almost doubled. However, George explains that the media mix for any campaign would depend on the purpose of the campaign and the kind of audience they want to reach out to. “While for a lot of our mass brands, TV continues to be the lead medium, there will be cases when Digital will take the largest chunk of our investments. Our investments will depend on our brand and the TG we are targeting,” he explains. Moreover, as a part of their digital investments, Marico is also looking at spending more on new-age social media platforms like TikTok. Marico’s marketing game-plan While premiumisation will continue to be a big focus for Marico, it will also continue to work on bringing people present in the unorganized loose oil category into the organized hair-oil segment. “We believe there is a huge opportunity in premiumisation in all the categories across personal care and we will continue to focus on that. We will continue to invest in new brands, new formats and new benefits for our consumers. Equally while we do that, our strength lies in playing in the core of the market which we have successfully done over the years in terms of upgrading consumers from the belly of the market. So it will be a dual strategy but both for me will lead to meeting our growth ambitions,” adds George.

Why premiumisation will continue to be a focus area and growth driver for Marico

<ul><li>If the pandemic has brought one certain change in the consumer mindsets, it is the move towards personal hygiene and wellness.</li><li>On the back of e-commerce and growing awareness about wellness, the men’s grooming category has seen unprecedented growth in the last few years.</li><li>To further build this category, <keyword id="3508584" type="General" weightage="20" keywordseo="the-man-company" source="Orion">The Man Company</keyword> has launched <keyword id="13237965" type="General" weightage="20" keywordseo="MinStrips" source="Orion">MinStrips</keyword>, rapid dissolving tongue vitamin strips.</li><li><keyword id="674163" type="General" weightage="20" keywordseo="Hitesh-Dhingra" source="Orion">Hitesh Dhingra</keyword>, Founder, The Man Company talks to us about the brand’s forays into the well-being category, brand strategy and growth vision for MinStrips, consumer insights and preferences that led to the innovation and larger vision.</li></ul>Around a decade ago, the male grooming industry was almost non-existent in our country. India only had razors, shaving cream and after-shave lotions for men and those who did care about their skin underneath their beards or mustaches, would quietly use the products available for women. India’s men’s grooming market, thankfully, has come a long way in the last few years, moving beyond shaving and deodorant products. This space has also attracted large FMCG brands such as Reckitt, which invested about Rs 45 crore in the Bombay Shaving Company. Meanwhile, Marico acquired Beardo and Emami increased its stake in The Man Company last year. These marketers have been redefining masculinity, self-expression and grooming through their campaigns. Hitesh Dhingra, Founder, The Man Company says that the segment has evolved and it is no more just beard or face that men care about, they are today giving equal importance to holistic grooming and wellness. With a push from e-commerce, the grooming industry has already expanded its reach beyond urban markets, witnessing an uptick from Tier II and III cities. According to Research and Markets, India's male grooming industry is poised to reach $1.2 billion by 2024 at a CAGR of about 11% and globally, as per a Statista report, the grooming market is projected to reach around USD 81.2 billion by 2024. Now, to further build this category, The Man Company is entering a new segment: nutraceuticals. It has forayed into the well-being category with the launch of MinStrips, rapid dissolving tongue vitamin strips. Dhingra speaks to Advertising and Media Insider about the company’s foray into well-being, category trends we can expect this year, key focus areas and revenue goals for the coming fiscal. Q. What was the thought and idea behind foraying into the well-being category? We started our journey as an essentially grooming brand to help men on their continuous evolution. We have strived to build trust among our customers all these years by formulating purest and finest quality products for their overall grooming under skin, hair, and body care. Considering the need of the hour and being one of the leading brands for men’s grooming products, we wanted to move the needle following a 360-degree approach to enable a better lifestyle for men. The idea is to take a holistic approach from external to internal grooming. Therefore, we forayed into the wellness category and launched our sub-brand ‘MINS’. As a brand, we have been synonymous with innovations. It is in our DNA. So, this time, we wanted to launch products that are on the go, effective, easy yet safe, something with which Gen Z could quickly resonate. After 2.5 years of thorough R&amp;D, we added MINS to our product portfolio. MinStrips are orally dissolving strips that help people tackle all the lifestyle hurdles. Needless to say, most millennials and Gen Z have a fast-paced and hectic lifecycle. This automatically raises concerns about sleep, stress and anxiety due to work pressure, better hair and skin (which is already our forte), performance and sexual wellness. We are addressing all these issues with our latest innovation, MINS. Q. MinStrips is quite an interesting product. What inspired you to launch it? The nutraceutical industry in India is witnessing a CAGR of 21% this year. There are substantial untapped market opportunities out there. We can also see an aversion amongst millennials and Gen Z from consuming capsules, powders, gummies and tablets. The reason is that there is still a taboo attached to nutraceuticals being challenging to consume or travel with as they are somewhat dependent on factors like water intake. In contrast, MinStrips are self-dissolvable oral strips. Users simply need to keep it on their tongue, and the process is done, they can have their daily dose of Vitamin with utmost convenience. Additionally, MinStrips come with sleek packaging in a travel-friendly format. The entire concept of effective and easy-to-use makes it an exciting product, especially for our young consumer base. Furthermore, as per our research, strips have 80% active ingredients compared to gummies (30%), capsules (20%) and tablets (10%). This also makes MinStrips a highly accurate, elevated absorption and quick action product compared to other formats. Q. Also, these are rapid dissolving tongue vitamin strips, what was the product insight there? You chose not to go with regular vitamin supplements, so what led to this innovation? We didn't start making MinStrips just now. We have been doing our research since the pandemic was in its initial stage. During our research, we identified some key problems like modern consumers didn't want to take daily capsules, tablets, or powder content. They also want more affordable, hassle-free and convenient Vitamin supplements. So, we decided to launch MINS, a unique Vitamin supplement format accompanied by added benefits. MinStrips are made with 100% natural ingredients. They are vegan and free from any chemicals, sugar and side effects. One of the USPs of the product is that these are non-habit forming which makes them safe and easy to consume. We have also gained lab certificates from leading laboratories like GMP Laboratories, HACCP, ISO Certification, and FDA to attest to our claim. Q. How would you spread the word? What is your marketing and distribution strategy? We have garnered a huge and loyal community in the last six years of The Man Company's journey. Today, we have 0.8M followers across Social Media and a consumer base of 2M. This community comprises progressive and like-minded gentlemen. As our initial marketing and distribution strategy, we will leverage our existing consumers to spread the word through various media and also by sampling. We will also collaborate with influencers and content creators to spread word of mouth through their individual experiences. Furthermore, in terms of distribution, apart from our robust e-commerce platform and marketplaces, we also have around 2000 offline touchpoints through Modern Trade and Exclusive Brand Outlets. MINS will be ready to avail on all of these platforms. Q. What is your marketing budget earmarked for this year? 35% of our revenue is to be invested in marketing. Q. How has the company and brands’ communication evolved over the duration of the pandemic? During the pandemic, ‘immunity’ became the buzzword and the need of the hour, which made the wellness industry boom. Therefore, we feel this is the right time to enter the market and create a dent. For The Man Company, these last years have turned out to be propitious. We engaged with our customers to practise self-love, which made ‘The Man Company’ a household name among men embarking on their grooming journey. Since salons and parlours were shut down, we introduced DIY products for face, hair, beard and foot care that were easy to follow while working from home. Q. What does your media strategy look like? Which medium gets your lion's share? By DNA, we are a digital-first company. We function in full swing on the back of Social Media marketing and content creators. Content creators lead social media, and we believe influencers can be our ambassadors. Moreover, since we are a lifestyle brand, we are very focused on UGCs. We are currently on the lookout for going regional and trying to speak in the way and language that our consumers speak across the country. We believe that we should not merely translate the communication but trans-create it. Simultaneously, we are also gearing up to foray to other novel platforms and formats shortly. Q. As you build the men's wellness industry in India, what are some of the trends that you are expecting to see? How has consumer behaviour changed after the pandemic in this category? The pandemic inadvertently forced people to become more aware of their immunity strength and hygiene factors. Given that, consumers, in our case men, started to talk about personal care, hygiene and grooming became an escalating point for the tremendous growth of the wellness industry. During the pandemic hours, since everyone was working from home and salons were closed indefinitely, home-care and DIYs became the need of the hour. To assist our customers, we also came up with easy-to-use products that do not need experts, but consumers can use them in the comfort and safety of their homes. In the post-pandemic era, we believe consumers will continue to pay special attention to their personal care and grooming regime. The trend to use chemical and cruelty-free products will continue to gain strength, and consumers will incline towards affordable and effective product lines. Q. What are some of the challenges in this category? The biggest challenge is that consuming nutraceuticals is still considered taboo. More acceptance through education and workshops is required. Most importantly, wellness products should be safe to consume, which is why we have gotten MinStrips certified by several leading laboratories. Considering consumers today are busy with their fast-moving routines, we wanted to make MinStrips-brought wellness a part of the daily schedule. It wasn't easy to come up with an unprecedented idea. Still, we wanted to bring a hassle-free and affordable Vitamin and wellness booster with an 'On the Go' convenience for our customers. And, we are glad to say that we succeeded in our endeavour. Q. The notion of toxic masculinity has forced men to ignore themselves. It judges men who take care of their health and skin. Do you think that notion is changing in India? Are men more open to this change? Be it through our products or campaigns, The Man Company believes in bringing out the 'Gentleman In You'. Since inception, we have witnessed a gradual change in the way men perceive themselves. Social media, movies, web series have spoken about this change for quite some time now. We also feel that India has been exponentially evolving in terms of mindset. Grooming has become an aspiration. It's no more just beard or face that men care about, but modern gentlemen are focusing on holistic grooming and wellness. We have garnered considerable traction from tier-II and tier-III cities, proving that men's grooming is witnessing a notable uptick. The Man Company has worked as a catalyst to bring in this change through various campaigns like #GentlemanTumhiTohho, #ScentOfAGentleman and Gentleman Kise Kehte hai. We'll continue to assist the journey of 21st-century gentlemen. Q. Which are your strongest markets? Are you looking at expanding your business further this year? We cater to all gentlemen irrespective of education, sexuality, religion, job profile, or age, but prominently, we struck chords with millennials and Gen Z clientele. Our target group is every gentleman who is real, modern, authentic, progressive and self-aware. During our growth journey, we realised that tier-II and tier-III cities have issues related to affordability and awareness related to men's grooming and personal care. So, we decided to start our e-business operations in these cities. Considering that we are launching a sub-brand (MINS) and a new product (MinStrips) in the new year, we are sure this year will end on a high note. Q. What are some of your focus areas for this year? From a brand perspective, we are focusing on thought-provoking leadership. We want to create a strong brand presence across the country and make The Man Company a household name even in the most remote locations. For the coming months, we are gearing up to collaborate with platforms like Cred, Trell, etc. to fortify our sales. We are also working on IPs, such as the Hall of Gentlemen, to celebrate gentlemen bringing selfless change to society. Apart from this, several other exciting IPs are in the pipeline that resonate with our core communication to bring out the #GentlemanInYou. We don't want to be a brand that does tokenism. Our goal is to become a catalyst in changing the mindset of men everywhere. Q. You are all set to double your sales to Rs 100 crores by the end of this fiscal. How are you planning on sustaining this growth this year? What are your revenue goals for FY23? We will be pushing content like never before and expanding our offline presence aggressively. In terms of MT and EBO presence, we'll ensure maximum outreach. We are also launching various interesting categories, starting with MINS and expanding existing categories with exciting and innovative products. In addition, recently, we have also launched our loyalty program called The Man Club for our community. The Man Company is expecting to touch Rs 225 crore revenue in the coming fiscal.

The Man Company aims to touch Rs 225 crore revenue in the coming fiscal; earmarks 35% of its revenue for marketing and advertising

<a href="http://www.businessinsider.in/searchresult.cms?query=Digital+advertising&amp;sortorder=effectivedate">Digital advertising</a> is the future of the industry. However, pop-up ads and unwanted re-directs often ruin the user experience. The same goes for gaming. While people love playing engaging games, the obtrusive ads that pop up randomly irritate, annoy and finally turn off gamers. <a href="http://www.greedygame.com/" target="_blank">GreedyGame</a> is looking to change all that. 
 <keyword id="3156877" type="UNKNOWN" weightage="100" keywordseo="GreedyGame">GreedyGame</keyword> is an in-game <keyword id="1751384" type="UNKNOWN" weightage="60" keywordseo="Native-Advertising">native advertising</keyword> platform that helps brands to tap into their precise target demographic. While obtrusion often ends up running audience bases, in this case publishers can monetize content without that fear. How you ask? GreedyGame solves it with its proprietary <a href="http://www.businessinsider.in/searchresult.cms?query=native+advertising&amp;sortorder=effectivedate">native advertising</a> platform. That way, gamers can enjoy gameplay seamlessly, without any annoying ads interrupting their experience. 
 
The team 
 Bangalore-based GreedyGame Media Pvt Ltd was founded in the year 2013 by <keyword id="383847" type="PERSON" weightage="40" keywordseo="Arpit-Jain">Arpit Jain</keyword> and <keyword id="3354197" type="UNKNOWN" weightage="40" keywordseo="Arink-Verma">Arink Verma</keyword>. Arpit is an alumnus of IIT Ropar. He has worked with PayPal Innovation Labs and led several social entrepreneurship projects like LabourChowk and FarmFresh, before starting GreedyGame. 
 
How do they do it? 
 
In-game objects like the background, characters and so on are blended seamlessly with ads, These dynamic native ads helps engage audiences even while they are playing their games. This will empower game developers to monetize their game development though non-intrusive advertising, and gamers won’t complain! 
 
Current Partners 
GreedyGame is working with over 50 games in India. The likes of Nazara, Reliance, Games2win, Octro, Nextwave, Hungama and Disney in the gaming industry, and brands like PepsiCo, <a href="http://www.businessinsider.in/searchresult.cms?query=Flipkart&amp;sortorder=effectivedate">Flipkart</a>, <a href="http://www.businessinsider.in/searchresult.cms?query=Snapdeal&amp;sortorder=effectivedate">Snapdeal</a>, Gatorade, Vespa, Airtel, Fastrack, EA, Amazon and Marico, among others have worked with them. 
 
With over 1 million daily active users, Best Marketing Spark award (2015-2016) from Marico and recognition as a Madlabs partner company, this startup has a lot under its belt. 
 
How are they selling? 
GreedyGame has a differential pricing model based on internal analytics of user interaction, engagement and complexity of the game. It charges on the number of sessions, including a cost per session. 
 
A session starts only after the end-user has crossed 60 seconds of gameplay, with the platform usually charging $8-10 for every 1,000 sessions. Currently, the company claims to have reached over a million users. 
 
In September 2015, the firm raised a seed fund of $200,000 from Times Internet and other angels like ex-Flipkart heads <a href="http://www.businessinsider.in/searchresult.cms?query=Ankit+Nagori&amp;sortorder=effectivedate">Ankit Nagori</a> and Sujeet Kumar among others. 
 
Expansion plans 
 
GreedyGame recently appointed Samuel John to the role of Head of Operations. John was previously the Director of Operations at <a href="http://www.businessinsider.in/searchresult.cms?query=InMobi&amp;sortorder=effectivedate">InMobi</a>. His experience has driven <a href="http://www.businessinsider.in/searchresult.cms?query=InMobi&amp;sortorder=effectivedate">InMobi</a>’s international operations plans, and GreedyGame is looking to leverage the same. 
 
In the coming six months, the startup is looking to expand its operations to Southeast Asia and the Middle East. 
 
Market 
According to <a href="http://www.livemint.com/Consumer/NLyFWGO2OEZ0aIUjY5keqM/Mobile-ads-are-fast-becoming-central-to-marketing-strategy.html" target="_blank">media reports</a>, mobile advertising in India has grown from a $25-million market in 2011 to $70-$80 million in 2015. Industry estimates say companies are spending 2-4% of their overall media advertising budgets on mobile ads, and it’s growing at a hefty 60-70% annually.

This mobile advertising startup can give stiff competition to the likes of InMobi

<ul><li>Price cuts impacted sales of FMCG majors in Q3, even as they were able to stem market share losses.</li><li>Slow offtake of products have also led to liquidity constraints in the general trade channel.</li><li>General trade accounts for two-thirds of FMCG sales, and their troubles are another roadblock for volume recovery. </li></ul>For most of the ongoing financial year, i.e. FY24, fast moving consumer goods players have been waiting for an uptick in rural sales. That never came, even in the third quarter (Q3), despite the onset of the festive season. High competitive intensity continues to persist, leading brokerages to cut their earnings estimates, as they see general trade troubles to add to the pressures, for the next few quarters. The management commentaries have not been encouraging either. The recovery of rural markets, which contribute to 45% of total FMCG sales, is linked to many uncertainties. “Due to lower agriculture yields and uncertainty of future crop outputs, rural consumer sentiment remains subdued. Consequently, the anticipated buoyancy from the festive season did not materialize. The dualism we've seen in the recent past continues with certain parts of the market recovering faster than the rest,” said <keyword id="20038672" type="General" weightage="20" keywordseo="rohit-jawa" source="keywords">Rohit Jawa</keyword>, CEO of HUL in an earnings concall. Lowered estimates HUL’s volumes grew 2% in Q3, but its value growth fell marginally by 0.3%. This was due to price cuts they had to take, especially in home care and personal wash segments. Brokerages have been disappointed with its festive quarter performance, even as it was able to stem market share losses with pricing interventions. “We believe demand slowdown, competitive pressure, distribution stress, and rising royalty rates are likely to have an overhang on HUL’s valuations. Management commentary on demand setting remains unexciting, as demand recovery remains a hope on the emergence of tailwinds,” said a report by Emkay which cut its earnings estimates by 3% for FY24 to FY26. Marico also saw subdued growth in its core portfolio of Parachute and Saffola. They saw flat to slight decline in value growth, due to price cuts and heavy local competition. The company also said that there is ‘no visible buoyancy seen in consumer sentiment’. “We expect overall demand trends to be subdued with no visible improvement affecting volume trajectory in Q4FY24. We expect domestic business to witness muted volumes due to stock reduction undertaken across the portfolio,” Nuvama said. It cut Marico’s FY24 earnings per share estimates by 2.1%, and revised its price to earnings multiples to 38x from 42x earlier. In addition to price growth, most companies had to grow their advertising and marketing budgets in double digits to fight off competition. But their robust expansion in margins due to sharp reduction in input prices helped absorb the impact. Going forward, analysts see A&amp;P costs remain elevated, while there has been a sequential upward movement in commodities like wheat, sugar etc. General trade troubles Slow offtake of FMCG products has had a far reaching impact on the general trade channel as well. General trade channels account for 75-78% of FMCG sales in India, as per a report by Bizom. It has been facing problems of its own, as sluggish demand has led to slow movement of goods. Retailers have been unable to pay up distributors due to liquidity constraints, increasing the credit cycle. A weak trade channel can be another roadblock for FMCG majors who are planning to grow their volumes. <keyword id="20374430" type="General" weightage="20" keywordseo="saugata-gupta" source="keywords">Saugata Gupta</keyword>, CEO of Marico too pointed out problems with general trade, and that they’re working to rejuvenate it. “General trade channel is instrumental in restoring pace in volume growth. We are seeing how we can improve return on investment (RoI) for our partners, and facilitate higher credit. We are also looking to diversify our portfolio in general trade,” said Gupta in an earnings concall. Marico’s efforts are expected to bear fruit only in the next financial year. In the meanwhile, brokerages consider it an overhang on the business. “We expect general trade to continue to suffer liquidity and profitability constraints leading to ROI challenges faced by channel partners due to weak structural growth,” says Nuvama. HUL too has made changes in its approach to general trade. It has revamped its margins for distributors recently, cutting fixed margins and increasing variable margins in the top 100 cities. At its earnings call, the company said it has not seen any adverse impact of it as yet. It defended its decision saying that it’s a future-ready margin structure. “We have incentivized distributors in big cities to essentially sell more, of course, but importantly also to service more stores, service and deliver them the next day and to sell more lines, especially more on market development of premium lead lines or more assortment, or more width. We saw, therefore, a better served <keyword id="20401784" type="General" weightage="20" keywordseo="kirana-store" source="keywords">kirana store</keyword>,” <keyword id="20194350" type="General" weightage="20" keywordseo="jawa" source="keywords">Jawa</keyword> said. The company has also been reaching out to retailers directly via its <keyword id="20401783" type="General" weightage="20" keywordseo="shikar" source="keywords">Shikar</keyword> app, and has even deployed more feet on the street. As per media reports, it serves around three million outlets directly. Yet, analysts see general trade troubles as an added challenge for HUL. “Reinforcing the general trade moat is now an added pressure, with changes in distributor margin structure,” said Emkay. With added challenges and muted sentiment, the road to recovery has only become slower for FMCG players.

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Marico's profit up by 14.1% to Rs 227 crore in Q4FY21; advertising and sales promotion sees a growth of 35% YoY

BI India Partner

Why premiumisation will continue to be a focus area and growth driver for Marico

Samarpita Banerjee

The Man Company aims to touch Rs 225 crore revenue in the coming fiscal; earmarks 35% of its revenue for marketing and advertising

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