The world’s largest consumer goods maker Procter & Gamble (P&G) almost touched the $2-billion sales mark in India, over three decades after it entered the country. The Cincinnati, US-based consumer goods maker grew 15% year-on-year in FY23 while net profit rose 26%, despite pressure on input costs and even after it increased price tags.
It reported sales of ₹16,089 crore and net profit of ₹1,682 crore across four Indian companies – pharmaceuticals firm P&G Health, shaving products maker Gillette, P&G Health & Hygiene and P&G Home Products. The company’s biggest arm, P&G Home Products, an unlisted entity that makes Tide detergent, Pantene shampoo and Pampers diapers, saw the biggest surge, with profit up 51% at ₹419 crore on net sales of ₹8,464 crore, a 27% increase during FY23, according to latest regulatory filings.
The company’s managing director LV Vaidyanathan said the performance was led by strong volume growth, premiumisation and productivity interventions.
“Our results can be attributed to our teams’ execution of our integrated growth strategies of focusing on daily use categories where performance drives brand choice, irresistible superiority across product, packaging, communication, go-to-market execution, and value, productivity, constructive disruption, and an agile and accountable organisation structure and culture,” said Vaidyanathan.
“We are confident these are the right strategies in near term to continue driving a balanced top- and bottom-line growth in a competitive macroeconomic environment.” P&G has invested over ₹20,000 crore in the past two decades in the country, which is already among its top 10 markets globally.
In India, P&G competes with Unilever’s local unit Hindustan Unilever (HUL), which is nearly four times its size. The company controls more than half the market for sanitary napkins and shaving razors, and has consistently gained shares in these segments despite being the market leader.
Unlike other companies which have 40-45% of sales from villages, P&G has been historically focussed on premium and urban-centric products. However, in a few states such as Kerala and Tamil Nadu, its rural shares are higher than that of urban, while Vicks has a bigger business in villages than it has in cities. Even for its entry-level shaving brand Gillette Guard, 45% of sales come from rural areas.
Two months ago, Vaidyanathan had in P&G’s first-ever investor call said it is investing aggressively in the supply chain to help navigate demand volatility.
“Historically, our supply chain has been a competitive advantage for us, and we are investing significantly to strengthen this advantage and be better positioned to handle larger capacity and higher ranges of demand volatility, while reducing over-dependence on singular nodes. We are calling this Supply 3. 0, an end-to-end synchronised, sustainable and resilient supply chain, amplified by data analytics,” he said.