Innovate to Grow

Marico aims to efficiently leverage the monetary resources at its disposal to create, enhance and distribute value to all stakeholders in the value chain. The Company invests behind innovation, brand building and distribution footprint, which enables it to consistently deliver an effective customer value proposition and expand its consumer franchise. With a 25% CAGR in total shareholder returns since listing, the Company strives to maximise shareholder value by delivering sustainable profitable growth while maintaining an optimal capital structure.

The Company aims to create and augment economic and societal value, by delivering top-quartile operating performance through efficient allocation of capital. Our performance will continue to be predicated upon investments behind our brands, distribution as well as building future engines of growth. To that effect, Advertising and Promotion spends as a percentage of sales, which was at 9% in FY19, will be stepped up by about 100 basis points over the medium term.

Cash generated from operations was `1,018 Crore in FY19, which remained the primary source of liquidity. Net surplus during the year was higher by `275 Crore at `613 Crore, mainly attributable to cash accruals and lower working capital requirements. Cash accruals are used for various purposes such as reinvestment in the business towards fixed assets and working capital requirements, dividend payments, and repayment of loans on the books, while building adequate reserves for any potential acquisition opportunities. During the year, the Company incurred capital expenditure of `162 Crore towards the maintenance of existing manufacturing facilities as well as capacity enhancements.

While borrowings mainly fund working capital requirements, the Company actively explores opportunities to optimise borrowing costs and maximise yield on investments while maintaining guardrails on safety, liquidity and returns. The Company ensures adequate access to funding and leverages the surplus to meet its operating needs and strategic objectives while managing its cash flows in a cost-efficient manner. Marico exercises prudent financial risk management that allows the Company to mitigate operating and strategic risks as well as capitalise on growth opportunities. As on March 31, 2019, its Debt/EBITDA was extremely comfortable at 0.27.