You indicated that volatility is only growing. Is it then possible to get away with calibrated price hikes or would you need to do more?
The need of the hour would be to be agile and responsive. If you take a lot of time to implement changes, you would then end up hurting your business more. However, if you have an organisation that responds quickly to market changes, it will help you tide over this challenging environment.
Do you see pricing power coming back to the market. You took modest price hikes in Q2. Will this increase?
The volatility on crude and currency is growing. They are key monitorables as we go ahead. Price hikes so far have been very judicious. But calibrated price hikes could increase as the volatility on crude grows, though benign vegetable oil prices (such as palm oil) for now are partially offsetting it. Since we have a portfolio of brands, we don’t take proportionate price increases across stock keeping units. For us, the price-value equation is very important.
What did you see in the FMCG market in the September quarter? Rural segment you said is growing at 1.25 times more than the urban one...
At an overall level, the FMCG market in terms of volume grew 7 per cent in the September quarter. Value-wise, growth was 9 per cent. If you see our numbers, we’ve been ahead of the market, led by rural growth. It is ahead of urban growth and what we find is that tier II and III cities have begun mimicking the trends and styles of metro India. We also find that the Hindi heartland is a massive growth opportunity since penetration level (of FMCG products) is still low. We set up offices in places such as Lucknow and Indore and that strategy has paid off. We are growing significantly faster in central India than in the rest of the country.