Marico, the Indian personal care and food conglomerate, aims to grow its oats-to-premium oils brand Saffola with a focus on adding value through product development.
The company booked higher second-quarter sales at its Saffola food business on the back of increased volumes and higher pricing.
Go deeper with GlobalData
Saffola Oats – the second largest oats brand in India – had a “good run” in the quarter, with value growth of 31%.
Marico is working on developing the value-added oats sector, introducing two sweet flavours with fruit to “compliment” the group’s savoury flavoured oats offering.
“Focus on value added offerings in the oats segment has enabled the company to capture 62% share in the flavoured oats market,” Marico noted. “The franchise is expected to reach a top line of circa INR700m-750m (US$12-13m) in this fiscal and is poised to cross INR100m (US$17m) landmark next year.”
Marico’s Indian premium edible oils franchise, which also trades under the Saffola brand, grew by 9.5% in volume terms during the second quarter. Value sales were also up as the group passed higher input costs along, hiking prices by an average of 3%.
On a group-wide basis, Marico reported revenues of INR14.3bn, up 28% year-on-year. EBITDA rose 16% to INR1.95bn. Net profit totalled INR1.18bn, up 12%.
“Marico has bucked the trend in Q2 with 8% volume growth (6.5% in 1Q) in a challenging environment,” Prabhudas Lilladher analyst Amnish Aggarwal wrote in an investor note.
According to the analyst, the company intends to expand in areas of future growth, including oats. “Marico is focusing on increasing market share in future segments like value-added hair oil, oats, personal care and hair gel and serum in youth.”
Click here to view the Q2 update from Marico.
