Marico targets D2C revenue of more than Rs 450 crore in 2024

Leading FMCG company Marico is targeting D2C (direct to consumer) turnover in the range of Rs 450 crore to Rs 500 crore in the next two and a half years.

'D2C' refers to internet-first FMCG brands whose sales grow exponentially using ecommerce channels. In July, Marico acquired a 60 percent stake in Apcos Naturals, which owns JustHerbs, a line of Ayurvedic results-driven skin and hair care offerings.

While JustHerbs generates business from its D2C website, it is also available on online marketplaces like Amazon, Flipkart and Nykaa.

“During the earnings call, (Marico's) management highlighted its D2C ambitions with a target of Rs 4.5 billion to 5 billion turnover by FY24E,” according to an Emkay India equity research report dated August 1.

“Digital-first brands include Beardo (acquired in FY2017), Just Herbs (recently acquired), and its organic brands Pure Sense and Coco Soul," said Ashit Desai, Vice-president (Equity Research) at Emkay, in the research report.

The report also said Marico is expected to make higher investments in Pure Sense and Coco Soul in the second half of the current fiscal, while Beardo could clock Rs 100-crore run rate by FY22-end.

Marico's e-commerce channel grew 61 percent in the first quarter of the financial year 2022 over a year ago. It contributed to 9 percent of domestic sales in the June quarter of FY 2022, up from 3 percent before the pandemic.

“Unlike the first wave, the pandemic affected deeper pockets of the country," Marico said in its stock exchange filing on July 30. "But business was not as disrupted as it was last year, given that supply chains were able to weather localised and staggered lockdowns, and retail stores operated for a certain number of hours during the day.”

The company reported a consolidated net profit of Rs 365 crore in the first quarter of fiscal year 2022. It grew 60.8 percent sequentially, but was 5.9 percent lower than the net profit a year ago.

Marico's total income was Rs 2,552 crore in Q1 FY 2022, up 25 percent sequentially, and 31 percent higher than its revenue a year ago. Its domestic revenue of Rs 1,992 crore rose 26.6 percent sequentially and by nearly 35 percent over the same quarter last year.

The domestic growth was led by the Saffola franchise, which grew 24 percent in volumes, and 60 percent in terms of value. Saffola Foods grew more than 100 percent in value terms in Q1 FY 2022 on a year-on-year basis.

Further, Marico clocked revenue of Rs 533 crore in its international markets. This was up 21.7 percent sequentially, and by 20 percent over the same quarter last year.