GST, Demonetisation continue to haunt rural markets: HUL
, ET Bureau|
Updated: Sep 27, 2017, 09.57 AM IST
While the FMCG sector faces some bumps, HUL remains positive on the mid-term outlook, especially for premium products
Rural markets in the country are yet to recover from the challenges posed by demonetisation, implementation of GST and volatile commodity prices, said fast-moving consumer goods major Hindustan Unilever (HUL).
"From double-digit growth in FMCG across urban and rural markets in 2012, the overall segment has fallen to single-digit growth, with rural lagging urban market," said HUL MD Sanjiv Mehta, quoting research agency Nielsen, in an investor presentation at Arisaig Consumer Symposium.
The company however, showed resilience in performance, reporting 8 per cent and 6 per cent growth in the past two quarters, from no volume growth in the December quarter, he said."The early part of the second quarter was affected by various myths in trade. But trade situation is improving gradually with the wholesale channel now stabilising," he said. Over the past fortnight, the company had made similar investor presentations for CLSA and JP Morgan.
The maker of Rin detergent also maintained it had increased its margins to 18 per cent, a 300 basis points rise from 15 per cent in 2010."Demonetisation was a big challenge to implement, but from a strategic, long-term point of view, it is the right thing to do in India," Unilever global CEO Paul Polman told ET earlier this month.
"In terms of GST, we had been working in a planned way for long for this smooth transition.We have certainly seen that translate into share increases amongst a big part of the business," he added.
The company claimed its had nearly trebled its market capitalisation to $41 billion since 2012.HUL remains positive on the mid-term outlook on FMCG market, especially at the premium end. It says the contribution of premium products to total sales will increase 170 bps to nearly a quarter of all products sold.
At the same time, demand for mass products will fall 230 bps to 35.7 per cent by 2019. Newer categories within HUL, such as male grooming, fabric conditioners, body and face wash, among others, have been growing nearly 2.5 times the HUL growth rate, said its presentation.
HUL also reiterated that netbenefits obtained from switchover to the GST regime has been passed off to the consumers through selling-prices adjustments. Consumer prices have been lowered On Tuesday, HUL shares fell 2.3 per cent on the BSE to close at Rs 1,217.50 a piece.
Rural markets in the country are yet to recover from the challenges posed by demonetisation, implementation of GST and volatile commodity prices, said fast-moving consumer goods major Hindustan Unilever (HUL).
"From double-digit growth in FMCG across urban and rural markets in 2012, the overall segment has fallen to single-digit growth, with rural lagging urban market," said HUL MD Sanjiv Mehta, quoting research agency Nielsen, in an investor presentation at Arisaig Consumer Symposium.
The company however, showed resilience in performance, reporting 8 per cent and 6 per cent growth in the past two quarters, from no volume growth in the December quarter, he said."The early part of the second quarter was affected by various myths in trade. But trade situation is improving gradually with the wholesale channel now stabilising," he said. Over the past fortnight, the company had made similar investor presentations for CLSA and JP Morgan.
The maker of Rin detergent also maintained it had increased its margins to 18 per cent, a 300 basis points rise from 15 per cent in 2010."Demonetisation was a big challenge to implement, but from a strategic, long-term point of view, it is the right thing to do in India," Unilever global CEO Paul Polman told ET earlier this month.
"In terms of GST, we had been working in a planned way for long for this smooth transition.We have certainly seen that translate into share increases amongst a big part of the business," he added.
The company claimed its had nearly trebled its market capitalisation to $41 billion since 2012.HUL remains positive on the mid-term outlook on FMCG market, especially at the premium end. It says the contribution of premium products to total sales will increase 170 bps to nearly a quarter of all products sold.
At the same time, demand for mass products will fall 230 bps to 35.7 per cent by 2019. Newer categories within HUL, such as male grooming, fabric conditioners, body and face wash, among others, have been growing nearly 2.5 times the HUL growth rate, said its presentation.
HUL also reiterated that netbenefits obtained from switchover to the GST regime has been passed off to the consumers through selling-prices adjustments. Consumer prices have been lowered On Tuesday, HUL shares fell 2.3 per cent on the BSE to close at Rs 1,217.50 a piece.
