P&G Hygiene sees rebound in rural demand, but urban stress persists

Mint

12-06-2025

New Delhi: Procter & Gamble Hygiene and Health Care Ltd (PGHH), the maker of Whisper, Vicks, and Old Spice, is seeing a steady revival in rural consumption, even as urban demand remains under pressure.
This divergence in consumer sentiment is likely to influence near-term growth in the fast-moving consumer goods (FMCG) sector, a top company executive said on Thursday.
"Demand in the FMCG, industry continues to evolve. While the non-food inflation continues to stay below RBI's (Reserve Bank of India's) medium-term target of 4%, consumption trends are still shifting,' said Mrinalini Srinivasan, chief financial officer, PGHH, during the company's virtual analyst day.
With a good monsoon last year and rural wages picking up, rural demand is showing signs of healthy recovery. 'Urban demand is not following the same trend. On the contrary, urban India continues to face financial challenges. While the government has announced interventions in the budget, we expect the impact of these on urban consumption to take some time,' she said.
In the near term, some of the challenges are expected to continue, Srinivasan said while maintaining a "cautiously optimistic" outlook for the future.
With the steady government and private investment and positive economic indicators, there surely are reasons to be optimistic, she said. "But one must keep an eye on the evolving global trade policies, which will have an impact on inflation and potentially demand,' Srinivasan added.
"However, we remain confident in the dynamic and integrated nature of our strategy to help us navigate the difficulties and continue to serve and delight consumers and to drive sustained, balanced results
FMCG volumes grew 4% in the 12 months ended 31 March, per researcher Kantar.
For the nine months ended 31 March 2025, the company reported net sales of ₹ 3,374 crore, a 3% increase compared to the corresponding nine-month period.
Profit after tax reached ₹ 636 crore, up 7% over the same period. This nine-month reporting period is a result of the company's transition to a new fiscal year calendar, from its previous 1 July to 30 June cycle.
Procter & Gamble, the Indian subsidiary of the American multinational consumer goods giant, operates through various entities in India, offering a wide range of products including shampoo (Head & Shoulders), detergents (Ariel), baby care (Pampers), and home care (Ambi Pur).
Its Indian operations also include two major listed companies: Gillette India (male and female grooming) and PGHH (female hygiene and healthcare).
During the last fiscal year, PGHH reported "balanced" growth across both the feminine hygiene and cough and cold segments, alongside one of its strongest innovation pipelines in recent years. PGHH holds half the market share for branded women's hygiene products in India, selling sanitary napkins under the Whisper brand.
"This has been possible because our focus has actually been to grow and build the category, and that's what we will continue to focus on. We cannot comment on the future launches and plans. We still have significant opportunities for growth, both on consumption and innovation in the categories we play,' she said.
The company has been intensifying its cost-cutting efforts and implementing greater productivity measures, particularly in response to high raw material costs.
'Specifically last year, through our productivity interventions, PGHH achieved savings of over ₹ 93 crores. That is the fuel that allows us to reinvest in superiority across the five vectors and stay ahead of what consumers want,' said Kumar Venkatasubramanian, CEO, PGHH.
Srinivasan noted that structural margins have improved significantly, despite mid-single-digit inflation in raw materials and manpower, and increased ad spends.
"…we have still been able to improve our net margin by about 60 basis points, driven by our deliberate efforts on productivity across all cost buckets, as well as innovation in the premium segments to enable consumers to trade up in line with their aspirations,' she explained.
The company, which also sells male grooming products under the Old Spice brand, said has expanded its distribution network by adding one million stores in the last three years.