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Amid the inflation in the country rising every quarter, Hindustan Unilever Limited's Chairman Nitin Paranjpe on 23 June said India will require some astute handling and a balancing act to make sure that growth does not stall.
Paranjpe, while describing the current macroeconomic situation as 'probably the most difficult economic situation' during the annual general meeting (AGM), said global supply chain disruptions due to the pandemic and geopolitical tensions have had an impact on India as well.
"It is true that we are going through probably the most difficult economic situation. Inflation is high, there are supply chain disruptions that are going on," he said.
He cited COVID-19 pandemic and geopolitical tension as reasons which disrupted many supply chains.
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"Therefore in India, we are probably getting to a situation where we have now seen 14 consecutive months of double-digit wholesale price inflation (WPI). I don't know when we have last seen something like that," Paranjpe said.
Stating that the WPI has had an effect on the Indian market, he said, "FMCG markets, which have generally been strong for a long period of time, have started seeing the effect of this and more recently, we have seen market growth rates moderate and our volume growth rates have actually become negative in the short term".
"Many people were complimenting India on how we were coming out of the COVID period but it does mean that the immediate feature is challenging, and it will require some astute handling and a balancing act to be able to make sure that growth does not stall and we are able to contain inflation."
However, he said, "I remain confident that as a country, we will be able to navigate through this crisis there. It's not just my saying. The World Bank believes that India will remain the fastest-growing economy in the coming years and therefore that should give us look forward to it with optimism even though the short term is very very challenging".
Commenting on the FMCG industry, he said, "I will say that we have to navigate the short term but I remain confident of the medium-term to longer-term future that this industry has".
Paranjpe cited low per capita consumption, a large young population, a growing middle class, rising affluence and adoption of digital technology as reasons for the company's bullishness for the sector.
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Responding to a query on a product price increase and its impact on consumers, Paranjpe said, " "The reality is that when you take ingredients like palm oil, you take crude, the impacted derivative outcomes in terms of plastics, and in terms of logistics, we have seen inflation, which is in excess of 50 per cent, that's the extent of inflation that we have seen. Therefore, it is truly an unprecedented moment. As a company, we are determined to try and see how we can mitigate the impact of some of this to our consumers".
He opined HUL undertakes the price hikes in a calibrated manner and would continue to do so. Though he acknowledged that it has hurt consumers.
"I feel for the common person in the country who has to deal with this hardship at this moment and you can be certain that this company will do everything possible to contain it to the extent that we can", he added.
Among other issues, Paranjpe spoke on company’s acquisition plans and growth strategy during the AGM.
With inputs from PTI.
