Zydus Wellness sees more of price-led growth as costs surge

Subscribe to enjoy similar stories.Mumbai: As the domino effect of the West Asia war builds inflationary pressures across the economy, Zydus Wellness Ltd sees a larger share of its growth coming from price increases rather than higher sales volumes in the coming quarters. The consumer wellness firm said rising packaging, freight and input costs are beginning to influence pricing decisions, reflecting the broader pressure on consumer-facing businesses.“While growth is driven by volumes, there will also be a value component, as there is some level of inflation,” chief executive officer Tarun Arora told Mint in an interaction on Tuesday.

“Given the current situation, the value growth we had assumed earlier is likely to increase, as costs have risen sharply.”Simply put, volume growth is driving revenue by selling more units, while value growth focuses on increasing the price of products.Arora said that the rising costs of packaging, freight, etc. are affecting pricing decisions.

“Over the past two-three months, we have witnessed higher packaging costs, along with increases in some ingredient costs,” he said. The chief executive, however, did not give any specifics on the nature of any price hikes undertaken or planned.Driven by the war-related supply disruptions, India’s wholesale price index (WPI)-based inflation rate surged to a 42-month high of 8.3% in April from 3.9% in the previous month.

And this pace is likely to only increase, as the country has this month seen retail prices of petrol, diesel and liquefied petroleum gas (LPG) being hiked.Zydus Wellness's views are in line with the broader industry. Large listed fast-moving consumer goods (FMCG) firms, including Hindustan Unilever Ltd, Britannia Industries and Dabur