Wipro Consumer CEO expects rural demand to revive by September

12 Jun 2024 , 12:33 PM

According to Vineet Agrawal, chief executive officer of Wipro Consumer Care and Lighting, there have been noticeable improvements in rural demand. He anticipates that the hinterland will recover by September thanks to a successful harvesting and monsoon season, and that sales of discretionary products could gain from continued stability and continuity in government.

“Although it’s still early, we are seeing strong growth in rural areas in the first two months of this quarter, and ideally, as the monsoon approaches, the rural economy will do well. From a consumer standpoint, the election results have no direct bearing, at least not from the FMCG perspective, although the mood does improve. According to Agrawal, premium items perform better in environments with greater continuity and stability. This year, they anticipate only a slight price hike, he told ET. “With a good monsoon, it’s not just money in the hands of the consumers but also positive sentiment which picks up, helping demand.”

The majority of everyday personal and home goods have seen price increases of 15% to 20% during the last two years as a result of growing commodity costs, which have decreased in recent quarters.

Due to inflation and an unpredictable monsoon, villages—which make up roughly 40% of the FMCG market as a whole—saw a 3-5% decline in demand over the course of more than a year. For the first time in almost three years, however, sales growth for fast-moving consumer items in villages outperformed cities in the most recent quarter, a sign of a possible rebound in demand supported by lower base and price reductions to counteract local competition.

“Last year’s monsoon was uneven; the effects of COVID and inflation, particularly food inflation, were still felt. However, with India rising 11.8% on a two-year CAGR and an overall growth of roughly 9.2%, we have obviously beaten the competition,” Agrawal continued.

In FY24, Wipro Consumer Care—a division of Wipro Enterprises—reported revenues of ₹10,300 Crore. International markets account for about half of its total income.

The company, which was founded in 1945 under the Vanaspati brand, offers a range of products such as dishwashing liquids, fabric softeners, soaps, and floor cleaners. Santoor, its main brand, is the second-biggest soap brand in the nation.

The company reported that during FY24, operating margins increased by 22% and that it increased by 4% in volume and 3% in value. Additionally, the business has already purchased over 15 brands and companies.

“We don’t have any financial constraints, and our balance sheet shows a lot of cash. We don’t want to acquire anything extremely small from an acquisition standpoint because it will take just as much work to make them successful as it would to develop a larger one,” Agrawal continued.

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