Companies are expressing confidence in India
The performance of consumer companies was mixed in the July-September quarter due to irregular heat, heavy rains and GST changes. Despite this, many big consumer companies of the world are positive about India. The confidence of foreign companies on the Indian market is strong and due to which more enthusiasm can be seen in the market in the coming days.
According to the ET report, key executives of about a dozen companies said that they will continue to invest in India, because the consumption situation here is stable and demand is growing faster than expected. The heads of Mondelez, Unilever, Carlsberg, Colgate-Palmolive, LG Electronics, Apple, Papa John’s, Diageo, Coca-Cola, PepsiCo and Levi Strauss said in their earnings call that India remains a fast-growing market for them.
Mondelez CEO Dirk van de Put said that some small pressures have been seen in India, but the overall situation is fine. He said that despite the problems related to GST, the company’s sales in India have increased at a moderate level in the September quarter. Unilever CEO Fernando Fernandez said that the company’s position in emerging markets is improving and India is in a good position in the medium term. According to him, GST reform had little impact, but with the price of 40% of the products being reduced by about 10%, demand is likely to increase further.
Improvement is visible in the market
Sales of summer products such as cold drinks, air-conditioners and refrigerators were affected due to changes in weather and early monsoon. The GST change process has affected sales in August-September. GST was reduced on many consumer products from September 22. Coca-Cola, PepsiCo and Carlsberg said that there was an impact initially, but now improvements are visible.
Carlsberg Chief Financial Officer Ulrika Fern said India’s beer market was affected in the last quarter due to heavy rains, but growth started back in September. Despite increasing market share, the company’s sales declined 1% in the September quarter. PepsiCo CEO Ramon L. Laguarta said that consumers are under pressure globally, but the situation is better in India. He said that there will be some impact due to weather and competition, but further improvement in the category is expected.
Rural markets are doing better than cities. Companies are focusing on premium products in urban markets. Colgate-Palmolive CEO Noel Wallace said that demand is slow in cities, while the situation in rural areas is stable. He said that the company is emphasizing on high priced products to increase its share in the urban market. Electronics companies continue to invest in factories and stores. Apple CEO Tim Cook said that in the September quarter, the company recorded its highest ever revenue in India and opened new stores.