 "Sanjiv Mehta")
In a media interaction, Hindustan Unilever managing director Sanjiv Mehta explains the way ahead. Edited excerpts:
Price fall impacted topline growth. How long do you see this lasting?
We cannot predict where commodity prices will go. But benign input costs will impact price realisations. Unlike five years ago when we were slow in responding to market realities (there was a commodity price downturn then), resulting in share loss, we do not intend to do that now. So we will take price cuts like we did over the past six months as commodity prices began falling, notably in soaps and detergents, implying that price growth will be lower. We will, however, continue to keep our focus on volume growth. Our volume growth over 2013-14 or the first three quarters of 2014-15, it was in the four to five per cent range. In the past two quarters, it had been six per cent. We will continue to keep our eyes on it.
Was volume growth broad-based this quarter?
Yes, volume growth was broad-based. It was only in one category - soaps and detergents - where there was a price deflation, which offset growth seen on the volume front in that segment. Otherwise, there was a healthy volume growth across categories such as packaged foods, beverages and personal products. For personal products, in fact, this was the strongest quarter (in terms of growth). We remain optimistic, therefore, as far as volume growth goes across categories.
What were the contributors to the personal products growth this quarter?
Hair care has been very good. We relaunched Clinic Plus, which is doing well. Tresemme, Dove and Sunsilk are doing well. We have invested a lot in developing the hair conditioner market, which has done well. Segments across the personal products portfolio delivered in terms of growth.
You mentioned about rural growth coming off at the sector level. Will the weak monsoon visible in the south and west impact rural sales?
Some time ago, the rural market was growing 1.5 times that of urban. The gap has narrowed now, implying that rural growth is slowing. Rural makes up a third of our sales, a slowdown there will impact us. Which is why, we have said improved market growth will depend on rural regions.
There have been unseasonal rains, pressure on disposable incomes in rural, lower minimum support price for crops. There is stress there, which will impact overall market growth. For market growth to stabilise, the pressure on rural will have to ease.
