Geopolitics biggest threat to FMCG: Wipro Consumer MD Kumar Chander

Mumbai: Geopolitical tensions have emerged as the biggest concern for India's consumer goods industry, according to Wipro Consumer Care & Lighting managing director Kumar Chander, who warned that any fresh increase in crude oil prices could quickly reverse the easing in raw material inflation even as consumption recovers.

"All it needs is just one statement in the US for crude prices to go up," Chander told ET. "Geopolitics is something that is difficult to predict. That's something all leaders would be worried about. That is the main thing."

The comments come as most consumer goods companies enter FY27 with improving demand after nearly two years of subdued consumption. But the focus has now turned to external shocks from conflicts in West Asia and global trade tensions that could push up commodity prices and squeeze margins.


"There is clearly an uptick in the demand environment," Chander said, adding that quick commerce and premiumisation are supporting urban consumption while rural demand has strengthened over the past six to nine months. However, he warned that the progress could be tested if an uneven monsoon hurts farm incomes.

The company also announced the acquisition of Philippine personal care company S Brands-its 16th global acquisition-strengthening its presence in Southeast Asia and making the Philippines its third overseas market with annual revenue exceeding ₹1,000 crore, after Malaysia and China.

Over the last two decades, it has spent over a billion dollars in acquisitions in domestic and international markets, including energy drink Glucovita, Kerala-based food brand Nirapara and Brahmins, Chandrika soap and Yardley.

"There is a fair bit of discipline around capital allocation because you are not doing vanity buying, and you want to make sure that you can be the best owner of the business and the brand for the longer term. Our success rate is better than the industry success rate," said Anita Bhat Zutshi, chief financial officer at Wipro Enterprises.

Wipro Consumer, which started in 1945 as a vanaspati brand, now has a portfolio including soaps, liquid detergents, fabric softeners, dish wash and floor cleaners and packaged food. Santoor, its flagship brand, has surged ahead of larger rivals and is the biggest soap brand in the country, the company said.

While input costs have eased from their March peak, the company said they remain well above pre-conflict levels. The price of palm oil, Wipro Consumer's biggest raw material, continues to stay elevated due to biodiesel mandates in producing countries, while packaging costs remain higher than before despite softer crude prices.

"Cost pressure was very high in March. It has eased since then, but it is not back to the January-February levels," Chander said.

He said that much of the benefit consumers received from the recent GST rate cuts on select household products has already been eroded by inflation. "A large part of it has got erased," he added.

Instead of relying on price increases, Wipro has cut trade promotions where possible, taken selective price hikes in categories such as soaps, and increased inventory of packaging materials to protect against supply disruptions.