Multinational CEOs say momentum in the Indian market is coming back

The Indian market is showing signs of recovery and things will continue to get better, chief executives of the world's top corporate houses have said in investor calls over the past week. These companies include names such as Unilever, Mondelez International, and Colgate-Palmolive.

Unilever Chief Executive Officer Paul Polman said on Thursday that he saw "brighter prospects" for India in the future.  "I was with Prime Minister Narendra Modi in Davos (at the World Economic Forum last month), and we had good discussions on the direction the country would take," Polman said in an investors’ call, while discussing fourth-quarter and full-year results for 2017. Unilever, like most multinationals, follows a January to December accounting year.

The world's second-largest consumer goods company reported a 4% growth in underlying sales for the December quarter, ahead of a consensus estimate of 3.7%. Underlying volume growth for the fourth quarter came in at 3.2%, led by markets such as India and Brazil, the firm said.

Mondelez Chief Executive Officer Dirk Van de Put, who took over from Irene Rosenfeld in November, also said that overall emerging markets revenue, which grew 6.3% in the December quarter, was due to markets such as India, Russia, Mexico, and Southeast Asia.

"Specifically in the Asia, Middle East and Africa (AMEA) region, our revenue grew 2.7%, led by exceptionally strong growth in India," de Put said, adding that the chocolate business was the highlight of this growth. Mondelçz is the largest chocolate maker in India, led by brands such as Cadbury.

Colgate Chairman, Chief Executive and President Ian Cook said they saw sequential improvement in net sales growth in the December quarter due to markets such as India, the US, and Europe. The growth in India, he said, was driven by volume and price as well as gains coming out of launches in the naturals space. 

"In India, we have seen our naturals offering approaching one share point and in modern trade approaching two share points. These businesses are off to a good start, supported by compelling advertising," Cook said in an investors’ call.

Clearly, India appears to be a bright spot for these firms after months of struggle due to the demonetisation and introduction of the goods and services tax (GST).

The Economic Survey (for 2017-18) also indicated the same — India would emerge the fastest growing major economy in 2018-19 with a gross domestic product (GDP) growth in the region of 7-7.5%. This would be ahead of the 6.75% GDP growth projected for this financial year, it said.

Polman said he remained optimistic of India's growth story, adding that policy measures such as demonetisation and GST were steps in the right direction. "We have always said that whilst the GST and demonetisation might give us short-term shocks and disturb these quarters a bit, they are also the right long-term things for the country," he said.

The three CEOs said their firms would pump in more money into new brand launches in India and on expanding their presence in traditional trade and rural areas. “We see significant room for distribution in traditional trade and that is something we are actively pursuing,” de Put said.

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