P&G India flags pressure on consumer demand, input costs

Procter and Gamble India has flagged emerging pressure on consumer demand and input costs as signs of weak urban consumption and commodity inflation risks resurface, according to company executives.

“While rural consumption continues to be higher than the urban consumption, we are seeing a softening trend driven by uptick in the inflation rates in the more short-term period,” Srividya Srinivasan, chief financial officer, Procter and Gamble Hygiene and Health Care and Gillette India, told investors, adding that the company is also monitoring the West Asia prices closely given their impact on commodity costs, even as India’s medium-term growth outlook remains positive.

The comments come as most consumer companies brace for potential margin pressure from higher crude-linked commodities after a prolonged period of benign input inflation. According to Srinivasan, crude prices have risen "anywhere 30-40-50%" since March, while derivatives such as resins and plastics have also seen sharp increases, though the company has so far avoided supply disruptions through long-term sourcing and productivity programmes.


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One of the world’s largest consumer goods maker P&G operates in India through four companies—pharmaceutical firm P&G Health, P&G Hygiene and Health Care and P&G Home Products and separately listed shaving products maker Gillette .

The company considers India amongst its top 10 markets across the globe, topping the $2 billion sales mark in India in fiscal year 2024, more than three decades after entering the country. The company controls more than half the market for sanitary napkins and shaving razors and has consistently gained shares in these segments despite being the market leader.

According to company chief executive V. Kumar, the present consumer environment is also being reshaped by inflation, rapid changes in retail channels and the emergence of quick commerce, social commerce and AI-driven shopping journeys, prompting the company to double down on innovation and supply chain capabilities.

"This reality of daily living costs going up has significantly altered the Indian consumer's psychology. Even consumers who have money are much more disciplined and thoughtful about how they spend it," he said, adding that consumers continue to aspire for better products even as affordability and value considerations evolve.

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"Consumers today are shopping very differently from the past. The consumer path to purchase is changing every day. It's non-linear," Kumar added.

Despite the near-term uncertainty, the companies maintained a constructive outlook on India. According to Srinivasan, who is set to take office as PGHHCL CFO on July 1, the country's long-term growth fundamentals remain intact even though "growth may fluctuate in the midterm.”

As market leaders, P&G's India businesses said their focus remains on category development rather than merely gaining share.

"We look at our role as driving category growth as the market leaders and how we can increase the user base," she said. The company said it continues to invest behind innovation, premiumisation, consumer education and distribution expansion to bring more consumers into grooming and oral care categories.

The company also indicated that India will continue to play a larger role in P&G's global manufacturing and supply chain network. Gillette India said around 85% of its products are manufactured domestically and the company currently exports finished goods to about 10 countries, while continuing to evaluate additional export opportunities.

In the past two decades, the Vicks maker invested more than Rs 20000 crore. In June 2023, the company said it will invest Rs 2000 crore in Gujarat to set up an export hub that will make healthcare products, especially digestives.

For the last quarter of fiscal 2026, PGHHCL reported a net profit of about Rs 153 crore, down 2% year-on-year, while revenue from operations fell 5% in the period to Rs 941 crore. For the full year, the company posted a 19% increase in profit to Rs 857 crore despite largely flat sales, aided by productivity gains and margin expansion.

Gillette India reported 8% revenue growth to Rs 3100 crore and 23% profit growth to Rs 654 crore for FY26, with management attributing the performance to premiumisation, category expansion and productivity-led savings programmes