Operating profit, calculated as earnings before interest and tax, depreciation and amortization (EBITDA), declined 12.4% on-year to Rs 368 crore, while margin contracted a sharp 205 basis points to 4.64%.
A sharp rise in input cost, staff cost, and other expenses dented the operational performance of the fast moving consumer goods major.
Raw material costs increased 27% on-year to Rs 6,472 crore, staff expenses increased more than 49% to Rs 73 crore, and other expenses shot up 50% to Rs 538 crore.
Sales in the oils and vanaspati segment, which make for more than 76% of the company’s total revenue, grew by 15.4% on year to Rs 6,066 crore. Sequentially, the growth was 2.5%.
The second major revenue contributor, food products segment, saw robust growth, as turnover rose nearly 4 times on year to Rs 1,570 crore. Sequentially however, it saw a drop of 35%.
After sharp volatilities and downtrend witnessed in the previous quarters, there was some stability and revival in the December quarter, the company said. The macro challenges faced earlier in terms of geo-political standoff, soaring inflation, supply constraints, high interest rates and demand concerns have waned a bit, it said.
International food, energy and other commodity prices have eased moderately in recent times.
India, per se, has revived fast, supported by good progress of rabi sowing, sustained urban demand, improving rural demand, a pick-up in manufacturing, rebound in services and robust credit expansion.
Prices of edible oils, the biggest portion of the company’s revenue, stabilized and recovered from the sharp decline witnessed in Q2.
Urban demand for FMCG products has been steady while rural demand continues to contract. Festive and marriage season revived the demand for the food products during the quarter, the company said.
Shares of the company on Wednesday ended 4% lower at Rs 1,162.30 on the National Stock Exchange. The stock has given strong returns of 38% in the last one year.
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