The company held its conference call on 16 July 18 and was addressed by Sanjiv Mehta CMD.
Key Highlights
Underlying volume growth stood at 12% on YoY basis for June 18 quarter. Favourable base and improvement in rural markets helped the volumes to grow. Comparable sales growth (excluding impact of GST) stood at 16% during the quarter.
Ebidta margin improved by 100 bps on a comparable basis, which was driven by improved product mix, lower raw material costs and savings. Ad spends were higher due to increase in promotional activities and competition.
All the business segments saw double digit sales growth. Such a strong quarter was seen after many quarters. On a comparable basis on YoY for June 18 quarter, Home care reported 20% growth in net sales, while Beauty & Personal care and Foods & Refreshments registered a 14% net sales growth each.
In home care segment, while double digit growth was seen in fabric wash and in household care segment, purifier segment was subdued and saw increase in competition.
Double digit growth was seen across the personal care, skin care and hair care sub segments.
One more good quarter for colour cosmetics segment. In Oral care, although growth was seen some more work is required to be done due to intense competition. Close up is doing well compared to Pepsodent.
EO (extraordinary) items relate to provisions towards some restructuring and few other matters. Post GST some restructuring was done on supply chain and this will continue in next few quarters as well. The company is looking to restructure and bring down its 2Key and 3Key supply chain partners and realign them.
Gradual increase in demand is visible across the business sub segments. Expects volume and margin growth to continue.
Crude is the major worry and any significant rise can affect the margins. There's already a sizeable increase in crude oil prices on YoY basis.
Overall consumer demand is moving up. Markets across urban and rural segment is seeing positive trend and the trend looks very much sustainable.
While there is a clear accelerating demand, there is also increase in ad spends and competitive activities to grab the increased demand.
The company has achieved a savings in costs of around 1% of turnover in FY 18. The savings shall continue further in FY 19 as well. This was led by innovations, way of doing business and overall costs control.
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