Unilever said it’s “over the hump in India,” citing the business revival in the Anglo-Dutch consumer goods company’s second-largest market.
“There’s been a pickup in economic activity and the marketplace in India after a very strong lockdown in the first half,” Unilever chief financial officer Graeme Pitkethly told investors during an earnings call. “It looks like we are over the hump in India in terms of the economy and the market growth numbers.” The maker of Dove shampoo and Lifebuoy soaps posted sales of 4.4% during the September quarter with sales in emerging markets rising 5.3%.
Unilever’s commentary marks a reversal from a quarter ago when it said rising Covid cases were a worrying trend in India and its local unit, Hindustan Unilever Ltd, saw a 7% drop in sales in the April-June quarter.
Improvement in Demand
It reported a 16% growth in sales in the September quarter on October 20, helped by the acquisition of GSK Consumer. Excluding the integration, revenue rose 3%, boosted by the relaxation of restrictions on manufacturing and distribution.
“The business in India did really well to grow in single digits,” Pitkethly said. “This quarter again was driven by hygiene products and our food refreshment portfolio in India which is now very, very strong with the acquisition of Horlicks and we are very excited about the prospects for foods in India going forward.”
Unilever said economic performance is largely dependent on countries choosing between opening up to safeguard jobs and protect businesses or imposing further lockdowns to curb infections and save lives.
In India, the lockdown imposed on March 25 saw many shops shutting and sales being restricted to essentials. Curbs began to be eased in May but mini shutdowns were enforced in various states because of Covid-19 outbreaks starting July.
HUL said Tuesday that urban markets were impacted due to limited mobility, while rural sales continued to grow. “If there is no further outbreak, then the worst is behind us. All the steps that the government has taken are clearly visible in the fact that rural consumption has remained resilient,” HUL chairman Sanjiv Mehta had said.