P&G Hygiene and Health Care Ltd said on Friday that green shoots in terms of rural consumption are visible and consumption trends in categories that it operates were broadly up. Stating that it remains cautiously optimistic, the FMCG major added that cost pressures have not receded according to expectations, and bottomline pressures will remain.
Responding to a businessline query on rural consumption trends at an investor call, Gautam Kamath, Vice-President, Finance, Procter&Gamble Hygiene and Health Care Ltd, said: “There are visible signs of green shoots in the rural economy. We remain optimistic about the growth, with some concerns about the monsoon and retail inflation. But the broader trend is very encouraging.”
Talking about the market growth outlook, the company said it remains cautiously optimistic. It added that consumption trends are broadly up driving optimism, but pointed out that factors such sequential pick-up in retail inflation in July-August and below average monsoons in August are driving caution. “On anecdotal evidence, September rainfall appears to have bounced back, and may have a big say on how the rest of the year pans out,” said Kamath.
The FMCG company also said that commodity prices have remained high and that it has not seen cost pressures receding as expected, indicating pressures on bottomline will continue. “We expect volume consumption growth within the FMCG segment to be in the mid-single-digits over the next five to seven years. There are, however, several categories where consumption is fairly underdeveloped and we see an opportunity to grow these categories in double-digits,” he added.
P&G Hygiene and Health Care Ltd’s portfolio includes Whisper, Vicks, and Old Spice (the balance portfolio is housed under other entities). The company, which is a market leader in feminine care and cough and cold categories, has been focussing on offering new products for evolving consumer needs and driving premiumisation. E-commerce channel’s contribution is estimated in double-digits to the company’s overall revenues.
“We will continue to drive topline and bottom line as well as EBITDA margins. We aim to grow bottomline ahead of topline in the foreseeable future. This will enable us to fund innovation, raise the bar on superiority and absorb the macro headwinds,” said Kamath.
Meanwhile, in an investor call for Gillette India Ltd, the company management stated that, the parent company, P&G continues to see huge growth potential for its Indian subsidiaries. India is among the top 10 markets for P&G globally and is expected to deliver consistent “double-digit” growth. In India, P&G is represented by four entities which include P&G Hygiene and Health Care, Gillette India, P&G Home Products and P&G Healthcare.