P&G India sales fall 14 percent but profitability pegged for future

By

Isabelle Crossley

Published
Dec 1, 2017

The Indian unit of Procter & Gamble have reported that their sales dropped again by 14 percent over the year to March 2017 but profit margins increased.

P&G India have reported that they experienced their second consecutive revenue fall last financial year but also reported that, despite a considerable dip in revenue, their profit margins had actually increased by 750 basis points. Moreover, where the brand was previously losing money in India, they are now profitable, attributing the  revenue fall to defocussing from brands that were leaching money from the company in order to expand their profit margins.

The business reported yearly sales for its three entities (which include cosmetics and healthcare items by brands such as Olay) at 9,097 crore rupees (approximately 1,367 million US dollars) for the past financial year, down 11% in those categories from 10,208 crore rupees (approximately 1,534 million US dollars) for the year before that.

Demonetisation last winter was a factor in the slump but the brand was clear that the main reason was a shift in focus away from less profitable brands. This came in response to equity firms urging large multinational businesses to expand their profit margins and generate greater shareholder returns. In order to expand their profit margins in India, P&G have taken an initial revenue hit that they believe will lead them to much greater profitability in the future.