P&G sees demand recovery with good monsoon and subsiding inflation

New Delhi: Procter & Gamble Hygiene Ltd (PGHH), which sells hygiene products under brands such as Whisper, Vicks and Old Spice, said it sees glimmers of hope in demand due to good monsoon rains and easing inflation, but also said falling rural wages and rising unemployment are short-term consumption concerns.

“These are definitely signs of recovery that we are seeing. In the FMCG sector, there are finally positive trends in consumption, both in rural and urban areas. Inflation has been declining and was below the RBI’s medium-term target of 4% in both July and August,” PGHH chief financial officer Mrinalini Srinivasan said at the company’s analyst day on Wednesday.

She said the rural market was also showing signs of recovery, mainly due to a good monsoon and easing inflation. “The category demand has grown healthily, with both category sales and users growing in double digits,” she added.

P&G India will focus on its “integrated growth strategy”, which includes focusing on everyday products and expanding the reach of its products.

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Kumar Venkatasubramanian, CEO of PGHH, said: “The strategy includes a range of products for everyday use where performance drives brand choice… which is core to the company’s operations; strength in product, packaging and communication, retail execution and value; funding strength through productivity and disruption across the value chain to future-proof the business, all enabled by an empowered, agile and accountable organisation.”

India’s fast-moving consumer goods (FMCG) industry saw a sharp decline in sales growth in June, mainly due to slowing sales of packaged food, according to data from intelligence firm Nielsen (NIQ).

Overall, the sector’s value increased by 4%.

PGHH sales increased 7% to ₹4,192 crore, with net profit remaining flat at Rs. ₹675 crores.

Procter & Gamble is an American multinational consumer goods manufacturer that operates through multiple entities in India and sells a range of products including shampoo (Head & Shoulders), detergent (Ariel), baby care products (Pampers), and home care products (Ambipurin).

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Its presence in India also includes two large listed companies – Gillette India (men’s and women’s grooming) and Procter & Gamble Hygiene & Healthcare (feminine hygiene and wellness).

Srinivasan said monsoon was normal or above normal in 75% of the country and rural demand was expected to maintain these positive trends.

“But it is important to note falling rural wages and rising unemployment, both of which should stabilise in the near term with the government’s recently announced interventions. Overall, this bodes well for consumption trends,” she added.

PGHH commands half of the Indian branded feminine hygiene market, which is currently valued at ₹3400 crore. The company sells sanitary napkins under the Whisper brand.

“We expect the category to continue to grow in double digits over the next three years,” she said. Growth in its feminine hygiene and healthcare categories has been “balanced” over the last year. For the company (PGHH), feminine hygiene products account for about 70% of its sales in India.

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However, categories such as feminine hygiene products remain underdeveloped in the Indian market, where per capita usage is low. At the same time, competition in the feminine hygiene products space is heating up, with more and more brands entering the fray, especially direct-to-consumer brands.

“Nationally, these brands (small and direct-to-consumer brands) account for less than 10% of the market share. Having said that, the competitive landscape has changed with many competitors entering the category. Healthy competition always helps the category grow,” she added.

Last year, PGHH saved ₹113 crore. “Productivity is now fully embedded in our operating model and integrated into every aspect of our operations. Last year, through our productivity interventions, PGHH achieved over ₹113 crore,” she added.

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