Vineet Agrawal, CEO of Wipro Consumer Care and Lighting, has observed promising signs of growth in rural demand, predicting a robust recovery by September, fueled by favorable monsoon conditions and a successful harvest. This optimistic outlook comes amid expectations that stable government policies will further enhance sales of discretionary products through consistent and sustained growth.
Agrawal highlighted the early signs of recovery seen in rural areas over the past two months. He anticipates that the forthcoming monsoon season will significantly boost the rural economy, fostering increased consumer spending. “Although it’s still early in the quarter, we are witnessing strong growth in rural areas. With the monsoon approaching, the rural economy is expected to thrive. While election results don’t directly impact consumption from an FMCG perspective, a stable government positively influences consumer sentiment, benefiting premium product sales,” Agrawal told ET.
Over the past two years, the prices of daily personal and household products have surged by 15-20% due to rising commodity costs. However, these costs have stabilized in recent quarters, allowing for only marginal price increases this year. Agrawal emphasized that a good monsoon not only puts money in consumers’ hands but also boosts positive sentiment, further driving demand.
The rural sector, which constitutes approximately 40% of the overall FMCG market, experienced a 3-5% decline in demand over the past year due to inflation and unpredictable monsoon patterns. However, recent data indicates a potential rebound, with sales growth for fast-moving consumer goods in villages outpacing urban areas for the first time in nearly three years. This resurgence is supported by a lower base and price reductions to counteract local competition.
Reflecting on the past year’s challenges, Agrawal noted, “Last year’s monsoon was uneven, and the lingering effects of COVID and food inflation were still felt. However, with India showing an 11.8% rise on a two-year CAGR and overall growth of around 9.2%, we have clearly outperformed the competition.”
Wipro Consumer Care, a division of Wipro Enterprises, reported revenues of ₹10,300 crore in FY24. International markets contribute to about half of this income. The company, established in 1945 under the Vanaspati brand, offers a diverse range of products, including dishwashing liquids, fabric softeners, soaps, and floor cleaners. Santoor, its flagship brand, is the second-largest soap brand in India.
The company reported a 22% increase in operating margins during FY24, with a 4% rise in volume and a 3% increase in value. Additionally, Wipro Consumer Care has successfully acquired over 15 brands and companies, reinforcing its market position. Agrawal mentioned, “We don’t have any financial constraints, and our balance sheet reflects substantial cash reserves. We aim to acquire larger brands that align with our strategic goals rather than smaller entities that require similar efforts to make successful.”