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business | IST

Witnessed strong performance in India; expect sales growth in high teens: GCPL

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Godrej Consumer Products posted its Q1FY22 business update. The company says it witnessed steady demand in product categories across key countries. Further, they expect to deliver India sales growth in the high teens this quarter. Sameer Shah, Head - Finance and Investor Relations, Godrej Consumer Products, discussed this further.

Godrej Consumer Products posted its Q1FY22 business update. The company says it witnessed steady demand in product categories across key countries. Further, they expect to deliver India sales growth in the high teens this quarter. Sameer Shah, Head - Finance and Investor Relations, Godrej Consumer Products, discussed this further.
There has been a very broad-based and strong performance in India. “Our growth was in high teens. There will be marginal price-led growth coming in largely from categories like personal wash and hygiene,” he said.
Personal wash and hygiene are close to around 40 percent of the company’s India business. “There are further sub-categories like bar soap, hand wash, hand sanitisers and disinfectants and even personal hygiene now in the portfolio. We remain quite confident of gaining market share in the soap category over the next many more years to come,” he added.
“We remain quite upbeat on the entire personal wash and hygiene portfolio and do expect this to be a meaningful contributor to our growth in the coming years,” he mentioned.
On palm oil prices, there has been a drop of around 20 percent from its peak. “There is a lag in the increase in input cost and increase in end consumer pricing. So, if this trend of palm oil price continues in the near-term, we will definitely not take any further price increase, which should be good from a consumption perspective,” he stated.
In terms of the rural and urban split, Shah said, “We are relatively under index on rural. Our rural salience is close to around 30 percent reach. There is a significant opportunity to drive penetration to also gain market share in rural India, especially in categories like household insecticides, hair colour where rural penetration is relatively on the lower side. So, we will continue to beef up our presence in rural.”
“We do have the aspiration of getting our rural salience from 30 percent to 35 percent over the next few years. In addition to that we will also continue to beef-up our urban reach as well as increase our productivity in the outlets in which we reach at this point in time,” he added.
The company will also continue to focus on some of the new channels like e-Commerce, B2C, B2B. “Those channels are relatively small at this point in time but basket of all those channels put together could be meaningfully big over a period of time,” he stated.
In terms of international business, Shah explained, “Our international business saliency to our overall global business on sales is around 45 percent. The performance was mixed in the last quarter. We had a flattish sales performance in Indonesia. However, we remain relatively optimistic of gradual recovery in Indonesia, driven by changes in overall macro-economic factors.”
In cluster of Middle East, Africa and USA, the performance has been extremely robust. The company delivered upwards of 50 percent of sales. Even on a two-year CAGR basis, the growth has been in double-digits.
For the full interview, watch the accompanying video.