Demand up, but inflation worrying: P&G Hygiene
Health Care Ltd on Friday pointed to a broad consumption rise in its business segments, even as steep commodity prices, erratic rains and the recent spike in inflation keep the maker of Whisper, Vicks and Old Spice on its toes. “We’re seeing consumption trends to be broadly up, driving our optimism," said Gautam Kamath, the company’s vice-president of finance. “However, retail inflation for the months of July and August have averaged 7% and August rainfall has shown an 11% negative deviation from the norm, driving the caution part of it.
On anecdotal evidence, September rainfall appears to have bounced back and may have a big say in how the rest of the year pans out," Kamath said at a virtual meet with analysts on Friday. The company highlighted “visible signs of green shoots" in the rural economy, adding concerns remain around a patchy monsoon, though the broader trend is “very encouraging". Commodity prices have remained high with little signs of easing, the management said.
Among the top three commodities used by the company, prices of two remain much higher in the current fiscal compared to FY21, Kamath said, without identifying them. “This means bottom-line pressure will remain. Of course, this could differ based on the particular commodities that impact each industry and each category," he added.
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