Global consumer companies to step up India play after strong December quarter

Global chief executives and financial heads of more than half-a-dozen consumer-facing companies such as Apple, Starbucks, Colgate, Mondelez, Diageo and Whirlpool said in recent quarterly earnings calls that they posted strong performance in their India businesses, one of the major growth drivers among emerging markets. Most of them said they will invest in capacity and distribution expansion in India owing to the long-term growth potential.

Snacking firm Mondelez's chairman Dirk Van De Put said the India business grew in strong double digits for the year and quarter, driven by both chocolate and biscuits segments. "We are going to have a slight uptick in capex, particularly as we need to invest in places like India. I mean, you look at the volume over the last five years in India, it has been stellar, and we are very happy, but we are at a point where we need to put down a little bit more capacity," he said.

Most companies are seeing softer demand globally as consumers cut back on spending, especially for discretionary products, amid inflationary pressures. India, so far, has bucked the trend, according to the executives.

Whirlpool Corporation's chief financial officer James Peters said India has one of the fastest growth rates globally which he expects will lead to 4-6% jump in sales volume in Asia - much higher than in the US and Europe. "We truly believe in the long-term trajectory of India; it is one of the strongest growth opportunities for Whirlpool. India's long-term outlook for growth and margins are both in the high single-digits, making India very attractive to operate in," he said.

The US-based parent plans to sell 24% in Whirlpool India while retaining a majority interest. Peters said this financial profile has created a very strong local public market valuation.

While Tim Cook, chief executive at Apple, told analysts that the company's India business grew in strong double digits in the December quarter to a record quarterly revenue, Diageo said with regulations moving in the right direction, it bodes really well for the company as the largest player in this segment which grew 16% in scotch.

Starbucks CEO Laxman Narasimhan, who visited India last month, said the company is confident of a significant headroom to improve revenue as well as profit in the long term and invest in partners and the business while delivering strong shareholder returns.

"I did this during my visit to India earlier this month and I will continue doing it to stay grounded in the realities of the business. As part of elevating our brand across the international segment, along with a second reserve store in India, we will open two additional Starbucks roasteries," Narasimhan told investors.

Colgate-Palmolive is bullish on India as it sees demand recovery in rural markets.

"In India, we will see the continued return to the rural segment, the vitality of the rural segment, which will bode well for volume as we move forward. We have some really strong innovation plans for India, particularly around our core businesses. We are excited to see that obviously be delivered in the market and executed," Colgate chairman Noel Wallace told investors in an earnings call.

"So India, very strong results across the board, 9% organic, continued strong pricing and sequentially better volume in that market. I would likewise say we remain very excited, bullish on market in India."