Procter & Gamble Hygiene and Healthcare (PGHH) and Gillette India (GI), both listed entities, said in their investor call that despite near-term macroeconomic challenges, an above-average monsoon will boost demand in India.
Both the companies are listed entities of Procter & Gamble India, Kumar Venkatasubramanian, CEO of P&G India and MD of PGHH and GI, told investors: “While we expect the volatile macro dynamics we have been experiencing to persist… our best path forward remains to double down on our dynamic, market-focused strategy to deliver balanced revenue and earnings growth and value creation.”
During the PGHH conversation, 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 steadily declining, with July and August closing below the RBI’s medium-term target of 4 per cent. Monsoon in 75 per cent of the country’s districts was normal or above normal, and rural demand is expected to keep pace with these positive trends,” Srinivasan said.
However, she also warned of falling rural wages and rising unemployment, but said both should stabilise in the short term thanks to recently announced government interventions, which should bode well for consumption trends.
“Looking to the near term, we expect there will still be challenges. However, we remain confident in the dynamic and integrated nature of our strategy, which will help us overcome the difficulties and continue to serve the underlying consumers and deliver sustainable business results,” she added.
Gautam Kamath, CFO at GI, said structural margins have improved significantly by 200 basis points this year, thanks to the company’s efforts to improve productivity across cost categories and innovation in the premium segments to meet consumers’ changing needs.
“We have been consistently and effectively expanding our coverage. Over the past three years, our reach and coverage have grown by more than 1.5 times,” he added.
He also mentioned that the company has developed a proprietary artificial intelligence and machine learning algorithm that analyzes consumer behavior patterns to customize a range of P&G products at the store level. With this, the company has moved from cluster-based planning to store- and neighborhood-based planning.
Talking about the upcoming festive season, he said, “The festive season coincides with the crucial retail buying period and we have developed comprehensive plans to serve both rural and urban markets through traditional retail, modern retail and e-commerce channels, with strategic partnerships with our customers focused on co-creating value during the season.”
First publication: Sep 18, 2024 | 9:05 PM IST