FMCG major Marico Ltd on Wednesday (July 5) said its India business reported low-single-digit volume growth in the first quarter of the ongoing fiscal due to significant trade destocking in Saffola edible oils and channel inventory adjustments in core portfolios.

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The company noted that demand trends in the FMCG sector remained stable during the quarter, although signs of improvement on a sequential basis were not clearly visible. While urban markets were steady, the anticipated pickup in rural demand remained elusive.

It expects that moderating headline inflation, hike in MSPs, easing liquidity pressures, and forecast of a near-normal monsoon continue to fuel hopes of a gradual recovery in rural demand in the course of the year.

Further, Marico mentioned “a minor volume drop in Parachute coconut oil, low double-digit volume growth in Saffola edible oils and a flattish quarter for value-added hair oils."

However, among the newer portfolios, foods continued its strong run, while premium personal care (including the Digital-First portfolio) remained steady.

Coming to the international business, the company maintained its healthy growth momentum as it delivered high single-digit constant currency growth during the quarter, with most geographies exhibiting resilience in a volatile global operating environment.

Talking about the consolidated revenue in the quarter, it declined in low-single digits on a year-on-year basis, dragged by pricing interventions in key domestic portfolios last year and further pricing drops in Saffola edible oils (amounting to a pricing decline of 30 percent year-on-year basis) during the quarter.

Among key inputs, copra prices stayed in a favourable zone and edible oil prices declined sharply, while crude derivatives remained firm. As a result, the gross margin is expected to expand materially on a year-on-year as well as on a sequential basis, it added.

Shares of Marico Ltd ended at Rs 538.85, up by Rs 12.25, or 2.33 percent on the BSE.

(Edited by : Shoma Bhattacharjee)