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Mumbai , July 17

MARICO Industries Ltd has reported a 14 per cent rise in profit after tax to Rs 14.82 crore for the quarter ended June 30, 2003, against the previous corresponding Rs 13 crore. Net sales and services for the period fetched Rs 203.16 crore (Rs 175.57 crore), a 15.71 per cent increase.

The company's board has declared a first interim equity dividend of 15 per cent (Rs 1.50 per share of Rs 10) on equity base of Rs 29 crore, besides a preference dividend of 8 per cent for the full year on redeemable preference share capital of Rs 29 crore. The total payout during the quarter was Rs 7.5 crore, including dividend distribution tax of Rs 0.9 crore, an official statement said.

At a press briefing, Mr Milind Sarwate, Chief Financial Officer, Marico, said, "Volume growth in high-margin products was excellent contributing to profitability. Improved market shares also helped. We believe that as we go forward, the quality of our earnings will be better than before."

In the first quarter, Marico's high-margin products grew by 8 per cent. On a moving annual basis, new products now contribute Rs 145 crore or 18 per cent of total turnover, up from earlier 16 per cent. Marico's refined oils franchise shrank marginally, "as it consciously withdrew focus from low-margin oils like soya and safflower shortages continued for most of the quarter."

In reply to a question, officials said the company keeps a constant watch on its brand portfolio, though restrained capital allocation for any does not automatically suggest likely exit.

Its business strategy prefers margins over plain volume growth, but Mr Harsh Mariwala, Chairman & Managing Director, Marico, said, at least 7-8 per cent of turnover growth was due to volume rise (hair oil volumes, for example, grew by 18 per cent). Additionally, benefits of price revision accrued.

According to him, future business growth would be from sectors like hair, skin and health foods. "There is still scope for growth in Parachute," he said of the company flagship brand, which saw a 5-6 per cent volume growth in first quarter. While the number of Kaya Skin Clinics was increased, growth in Marico's global ayurvedics business - through subsidiary Sundari LLC - is being authored abroad via new sales channels, including TV shopping channels and Spa.

However, given brand building initiatives, these new businesses returned a negative first quarter bottomline of Rs 1.7 crore. Mr Sarwate said Marico as approached the Courts for redressal on its earlier attempt to acquire `Chandrika' soap brand.

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