Key facts
- Procter & Gamble India executives reported pressure on consumer demand and rising input costs.
- Urban consumption is softening, influenced by recent inflation trends.
- Commodity costs, particularly those linked to crude oil, have increased significantly.
- P&G India's sales surpassed $2 billion in fiscal year 2024.
- The company is adapting to evolving consumer behavior driven by inflation and new retail channels.
Procter and Gamble India has indicated that consumer demand and input costs are facing increasing pressure, signaling a potential slowdown in urban consumption and renewed risks from commodity inflation. Srividya Srinivasan, CFO of P&G Hygiene and Health Care and Gillette India, noted a softening trend in urban demand, contrasting with rural consumption, and attributed this to rising inflation in the short term. The company is closely monitoring commodity prices, particularly those influenced by West Asia, as crude oil prices have surged between 30% and 50% since March, impacting derivatives like resins and plastics.
Despite these near-term challenges, P&G maintains a positive long-term growth outlook for India, which is among its top 10 global markets, having surpassed $2 billion in sales in fiscal year 2024. CEO V. Kumar highlighted that inflation, evolving retail channels, and the rise of quick and social commerce are reshaping consumer behavior, leading to more disciplined spending even among affluent consumers. The company is focusing on innovation and supply chain capabilities to navigate this environment.
In terms of financial performance, PGHHCL reported a 2% year-on-year decrease in net profit to approximately Rs 153 crore and a 5% drop in revenue to Rs 941 crore for the last quarter of fiscal 2026. However, for the full year, PGHHCL saw a 19% profit increase to Rs 857 crore, supported by productivity gains. Gillette India reported an 8% revenue growth to Rs 3100 crore and a 23% profit increase to Rs 654 crore for FY26, driven by premiumization and cost savings.