Above normal monsoon to help revive consumer demand: PGHH, Gillette India
Procter & Gamble Hygiene and Healthcare (PGHH) and Gillette India (GI), both listed entities, noted in their investor call that despite near-term macroeconomic challenges, an above normal monsoon will help revive demand in India.
Both companies are listed entities of Procter & Gamble India, Kumar Venkatasubramanian, CEO of P&G India and MD at PGHH and GI told investors, “While we expect volatile macro dynamics we’ve been experiencing to continue… our best path forward remains to double down on our dynamic, market constructive strategy to deliver balanced top and bottom line growth and value creation.”
On the PGHH call, Mrinalini Srinivasan, CFO, said that positive trends are finally emerging in the Indian fast-moving consumer goods (FMCG) industry, both in urban and rural areas.
“Inflation has been consistently softening, with July and August closing below the RBI’s medium-term target of 4 per cent. Monsoon across 75 per cent of the country’s districts has been either normal or above normal, and rural demand is expected to keep up with these positive trends,” Srinivasan said.
However, she also warned of declining rural wages and rising unemployment, but said that both should stabilise in the near term with the government’s recently announced interventions, which should augur well for consumption trends.
“Looking at the nearer term, we anticipate some challenges to continue; however, we remain confident in the dynamic and integrated nature of our strategy to help us navigate the difficulties and continue to serve the underlying consumers and drive sustained business results,” she added.
Gautam Kamath, CFO at GI, said that its structural margins this year have significantly improved to the tune of 200 basis points, driven by the company’s efforts on productivity across different cost buckets, as well as innovation in the premium segments to enable consumers to trade up in line with their changing aspirations.
“We’ve been consistently and effectively growing our coverage. Over the last three years, our reach and coverage have grown over 1.5 times,” he added.
He also mentioned that the company has developed an in-house artificial intelligence and machine learning algorithm that analyses consumer behaviour patterns to customise a range of P&G products at the store level. With this, the company has transitioned from cluster-based planning to store- and neighbourhood-based planning.
While talking about the upcoming festive season, he said, “The festive season aligns with the crucial buying period in the retail industry, and we have developed comprehensive plans to cater to both rural and urban markets through traditional retail, modern retail, and e-commerce channels, with strategic partnerships with our customers focused on joint value creation in the season.”
First Published: Sep 18 2024 | 9:05 PM IST