Marico Bangladesh secured handsome profit growth in the third quarter of its financial year 2024-25 by increasing its sales, even amidst the erosion of people's purchasing power due to inflationary pressure.

With a focus on the beauty and wellness industry, the multinational fast-moving consumer goods (FMCG) company reported a profit of Tk 139.68 crore in the October-December quarter (its financial year began last April).

This represented a year-on-year growth of 26 percent.

The revenue of the company reached Tk 404 crore, reflecting a robust 19.7 percent year-on-year growth, despite heightened inflationary pressures and ongoing macroeconomic challenges.

While coconut oil remains the largest contributor to revenue, the value-added hair oil, beauty and health, and men's grooming segments have showcased strong growth momentum.

Based on its high profit, the company's board of directors declared an interim cash dividend of 440 percent, or Tk 44 per share, for those who retain the company's shares until February 23.

The price of the shares rose slightly to Tk 2,321 on the Dhaka Stock Exchange yesterday.

Marico's earnings per share (EPS) stood at Tk 44.34 for the October-December quarter, up from Tk 34.93 in the same period of the previous year, according to its financial statements.

The company attributed the growth to an increase in revenue, an improvement in gross profit margins, and higher net finance income. However, there was a drop in its cash flow, which is an indicator of a company's financial health.

Marico reported a net finance income of Tk 16 crore, which was 47 percent higher than that of the same quarter in the previous year.

The company's financial investments reached around Tk 690 crore. In the higher interest rate regime, the investment is yielding high income for the company, contributing to its profits.

Spending on products like coconut oil accounts for a small portion of people's overall expenses, which is why high inflation had little impact on the demand for this product, said an analyst of a top brokerage house.

On the other hand, the brand's perceived value among people is high, so its sales rose, he said.

The price movement of copra, the primary raw material for coconut hair oil production, has a direct impact on the profit margins of hair oil companies. Recently, copra prices have risen sharply.

Meanwhile, the World Bank commodity outlook also suggests an uptick in coconut oil prices in 2025 before stabilising and trending downward from 2026.

However, the impact can be limited as the company is shifting its focus towards value-added hair oil and non-hair oil categories, which offer higher margins and are less reliant on copra, providing a buffer against raw material price volatility, he added.

Marico's net operating cash flow per share (NOCFPS) dropped to Tk 88.35 for the April-December period, compared to Tk 143.15 a year earlier, which the company said was primarily due to higher payments to suppliers.

The net asset value (NAV) per share also declined at the end of December 2024 compared to that at the end of March 2024, as the company's retained earnings dropped following dividend payments during FY25.

Including the third-quarter earnings, Marico's profit per share in the first nine months of the fiscal year increased by 27.5 percent to Tk 145.65 from Tk 114.22 a year earlier.

Marico reaches over 790,000 outlets with a diverse portfolio that includes hair care, edible oils, and male grooming products, according to its website.