‘De­mand & Re­cov­ery to Strengthen in H2’

The Economic Times - - Brands: Creating Desire -

Go­drej Con­sumer Prod­ucts said it has seen a rea­son­able re­cov­ery and pick up in de­mand in the im­me­di­ate tran­si­tion pe­riod in July, a trend that will get stronger next quar­ter on­wards. How­ever, whole­sale chan­nel and Can­teen Stores Depart­ment con­tinue to weigh down over­all sales num­bers for most com­pa­nies in­clud­ing Go­drej. “We be­lieve the re­cov­ery could take about a cou­ple of months,” Vivek Gamb­hir, MD at GCPL, told ET’s Sa­gar Malviya af­ter declar­ing quar­terly earn­ings. The maker of Good Knight and Cinthol posted rev­enue growth of 6% to ₹ 1,186 crore in the do­mes­tic mar­ket while net profit fell 2% to ₹ 150 crore. Edited ex­cerpts

De­spite tran­si­tion is­sue due to GST, have you seen re­cov­ery in de­mand com­pared to ei­ther se­quen­tial or cor­re­spond­ing quar­ter? Con­sumer de­mand has seen a rea­son­able re­cov­ery and has picked up in the im­me­di­ate tran­si­tion pe­riod in July. Ru­ral mar­kets have also per­formed well as the in­dus­try has passed on the GST ben­e­fits to con­sumers. We ex­pect the sit­u­a­tion to nor­malise dur­ing the course of the sec­ond quar­ter and wit­ness stronger growth in the sec­ond half of the year. This will be ac­com­plished as the chan­nel adapts to the new tax sys­tem, a strong mon­soon and ben­e­fits of lower prices that get passed on to con­sumers.

Has GST led is­sues in terms of de-stock­ing by trade re­solved com­pletely now? We be­lieve the re­cov­ery could take about a cou­ple of months as the whole­sale chan­nel ad­justs to the changes in the tax re­form. We are wit­ness­ing a faster tran­si­tion in the West­ern and South­ern parts of the coun­try while the Eastern and North­ern mar­kets are tak­ing a bit longer. The re­tail chan­nel has re­verted to its ear­lier stock­ing lev­els and we con­tinue to work with our or­gan­ised trade part­ners to en­sure that the con­sumer de­mand is met and re­plen­ished at all times.

Are you still fac­ing any is­sues in trade that are im­pact­ing sales? The Can­teen Stores Depart­ment con­tin­ues to be im­pacted as their pur­chases are likely to re­sume full steam only in Au­gust. Only par­tial sup­plies have re­sumed as of now.

A few com­pa­nies said July con­sump­tion or ac­tual de­mand for prod­ucts re­mained ro­bust? We have seen a rise in de­mand. We are hope­ful that with a strong mon­soon and be­nign in­fla­tion, con­sump­tion and spend­ing will rise in the sec­ond half of the year.

FILE PHOTO Vivek Gamb­hir, MD at GCPL

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.