Wipro Consumer’s Volumes Jump 16% In FY21, Second Covid-19 Wave Mar Q1
Wipro Consumer Care & Lighting Pvt. saw its volumes jump 15.8% in the fiscal ended March 2021, helped by growth across key markets.
“FY21 was a good growth year for us, probably the best in the industry,” Vineet Agrawal, chief executive officer at the maker of Santoor soaps, said at a media briefing. For the international business, the Philippines market grew 10% and South Africa by 13% during the financial year, he said.
The company’s revenue stood at Rs 8,400 crore in FY21 against Rs 7,700 crore in the prior year. Its India business revenue grew at 17.3% during the period.
Wipro Consumer posted an operating margin of 12.7% in FY21.
The domestic market for the company, however, faced challenges in the first quarter of FY22 as demand took a hit because of a surge in Covid-19 infections and a high base in the year-ago period, according to Agrawal. The company’s top line from the domestic business grew in high single digit in the April-June period.
“This year, quarter one, I think outside of India, Malaysia has done well and grew 20%, but it’s on a lower base. Vietnam has grown 7%, Middle East 8% and South Africa at about 30% plus,” Agrawal said.
This year, the impact of Covid on rural areas was significantly higher, Agrawal said. Still, the growth rate in India’s hinterland is slightly higher than urban. There was an overall surge in demand for sanitisation products, but was still lower compared to the first wave, he said.
Sales of the company’s discretionary products took a hit during the first quarter, but were better compared to last year. Sales of such products, including talcum powder and deodorants, increased 70-75% year-on-year in the three months ended June 2021. That, however, is still 7-8% lower than the pre-Covid levels in the April-June period of FY20.
There was still some demand for discretionary products, according to Agrawal, because people were still moving around and meeting in small groups as the curbs this time were not as severe as the nationwide lockdown in 2020.
Wipro Consumer has hiked prices of Santoor soaps twice—at the end of March and again in June—by 8% as raw material palm oil costs surged. But it doesn’t plan to increase prices for the third time.
High raw material costs, according to Agrawal, prompted companies to cut down on advertising spends in June to protect margin.