FMCG major Marico has registered a ‘low single-digit’ decline in its sale volumes in India during the January-March quarter of the financial year 2020-21.
In a regulatory filing, the company said that signs of improved across categories were seen until early March, but the eventual disruption due to the restriction across states and the nation-wide lockdown offset the improvement achieved.
“Overall secondary growth in the quarter was in low single digits, as primary movement of goods was relatively more impacted during the lockdown period. Value growth for the business continued to trail volume growth,” the company said.
Traditional trade, which was already reeling under liquidity constraints, was further weakened, it said, adding that modern trade and e-commerce still managed to stay on the path of growth.
“During the impacted period, the company could register sales largely in the edible oils and foods portfolio. The continued healthy growth in the Saffola portfolio was further topped up by households stocking up on food and essential items in the early stages of the outbreak. Overall, the India business posted a low single-digit volume decline in the quarter, with very skewed high growth in the Saffola portfolio.”
In view of the nation-wide lockdown announced by the government, all offices across India have been shut down and all employees are working from home using remote access, virtual private network and enterprise communication platforms, it said.
In line with the directives from government authorities, production at units that manufacture essential food and grocery products continues at a much reduced scale, while deploying highest safety standards. Production is currently suspended at company’s other manufacturing units and shall commence as and when government approvals to that effect are received.
The company noted that the distribution network has also been significantly impacted due to lack of manpower at each point.
“We are focusing on movement of essential food and grocery items to the consumers subject to necessary approvals from local Government authorities and taking all possible efforts to ensure uninterrupted supplies of essential products to our customers across channels (general trade, modern trade and e-commerce) within the existing constraints,” Marico said.
On its international operations, the company said that with Covid-19 assuming the nature of a pandemic, the international businesses were also affected.
“With many of the territories experiencing partial or complete lockdown in March, the international business recorded a mid-single digit decline on a constant currency basis.”
Marico also said that it has started an aggressive cost management exercise to mitigate the impact of reduced sales.
“The company will continue to drive sustained profitable volume-led growth over the medium term, through its focus on strengthening the franchise in the core categories and driving the new engines of growth towards gaining critical mass,” it added.