MUMBAI: An uptick in inflation is starting to “take a toll” on consumers who are increasingly becoming more mindful in terms of spending, Procter & Gamble (P&G) India said on Tuesday, projecting short-term headwinds to growth amid macro-economic risks. “Inflation is all around us, across food, energy, healthcare and so many more areas of everyday spending. The reality of daily living costs has significantly altered Indian consumer psychology. Even consumers who have the resources are much more disciplined and thoughtful about how they spend it,” said V Kumar, CEO at P&G India during the company’s analyst call.
The US-headquartered consumer goods giant now led by Mumbai-born Shailesh Jejurikar sells a range of products including Head & Shoulders shampoos, Whisper sanitary pads and Tide detergents in India. Volatility in crude oil prices driven by the West Asia war has led to a spike in costs of raw materials such as plastic by nearly 50%, translating into high costs of goods produced, executives at the Indian unit said. “But we are not out of stock. Our priority has been to procure supplies. Looking at the near-term, we anticipate some (overall) challenges to continue,” said Srividya Srinivasan, incoming CFO at Procter & Gamble Hygiene and Health Care (PGHHCL). In its Q3FY26 global earnings announced in April, P&G had warned of a $1 billion post-tax hit to its fiscal 2027 profit from surging oil prices.The war which dragged on for months choked energy flow and disrupted supply chains, stoking inflation and erasing gains from GST cuts. A host of FMCG companies have already taken at least one round of price hikes. Even though the US and Iran are headed towards a formal signing of a peace deal this week, it needs to be seen if the pact lasts in the long-term. Also, prospects of deficient monsoons amid El-Nino pose risks to consumption. “With delayed monsoons this year, growth rates are getting impacted,” said Srinivasan. P&G is doubling down on execution in India as instant deliveries and online consumption are changing the way people discover brands. The company’s strategy will be to build superior product propositions for consumers and premiumise as they become more discerning.“We have a positive outlook on India’s medium-term growth prospects,” said Srinivasan but also warned of near-term uncertainty arising from the macro-economic risks.
