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Packaged consumer goods company Reckitt on Wednesday reported double-digit growth in its India health business with disinfectant brand Dettol reporting strong revenue growth while its hygiene business, comprising of brands such as Harpic and Lizol surface cleaner, put up a “strong" performance, the company said in first quarter earnings.

However, the company’s top management flagged rising covid cases in markets such as India and Brazil where the situation is “deteriorating markedly".

This said Laxman Narasimhan, chief executive officer at the company, is set to have implications on consumer behaviour across markets and will be marked by elevated use of cleaning and hygiene products.

Its health business that comprises of brands such as Dettol, Durex and over-the-counter brands such as Strepsils reported double-digit growth in India, the company said. However, overall sales fell 13% globally owing to a weak flu season.

“By geography, we have seen double-digit growth in India, with strong performances in China, UK and Russia, whilst the US declined as a result of the Mucinex performance," the company said in an earnings release on Wednesday.

Globally, Dettol revenue was stable year-on-year as a result of the significant pantry loading which took place in the comparative period, and overall demand remains significantly higher than the levels seen pre-covid, it added.

In India entry into new segments benefitted sales of Dettol. “In India, revenue growth (for Dettol) has remained strong as underlying demand and expansion of key segments such as disinfectant spray and laundry sanitiser have more than offset increased competitive pressures," it said.

Within the company’s hygiene business—India business reported strong performance. Overall, the company saw very strong, volume-led growth, driven by brands Lizol, Finish and Air Wick, it said.

“By geography, most regions grew in the double-digit range, with particularly strong performances in North America, UK and India. In Brazil, one of hygiene’s largest markets, revenue declined reflecting difficult economic conditions," it added.

Reckitt—that has benefitted from the covid outbreak as demand for its cleaning and hygiene brands such as Lizol, Dettol and Harpic increased—reported net revenue growth of 4.1% during the quarter.

“2021 has started well with like-for-like net revenue growth of +4.1% in line with our expectations. This brings two-year growth to over 17% as we lap the pantry loading of March 2020. Demand for Lysol and Dettol continues to be strong as consumers remain vigilant to the spread of the virus and see use of our products, and improved hygiene habits, as a way of protecting their health and regaining normality in their lives," Narasimhan said.

However, Narasimhan said that underlying drivers of near-term demand for disinfectant products are dynamic, with countries around the world at different stages of the pandemic. Reckitt is closely tracking shifts in consumer behaviour to understand supply and demand trends, he added.

The company said that countries around the world are now at very different stages of the pandemic, with cases in Brazil and India, for example, rising rapidly, whilst Australia and China have seen the virus largely recede.

“The roll out of vaccinations also varies significantly, with large proportions of the UK and US populations having now received a first dose. These factors, along with evolving scientific understanding of the virus, are resulting in changing government advice and restrictions. As a result, we continue to monitor a number of leading indicators closely to understand how demand dynamics will play out over the course of the year," the company said.

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