CFO of Marico Industries Milind Sarwate believes that the FMCG sector has emerged out of the rut that it was in until a few years ago. He feels that the challenge is to maintain the momentum and keep the consumer sentiment alive.
Sarwate advocates that FMCG companies need to innovate and focus on consumers.
Excerpts from CNBC-TV18's exclusive interview with Milind Sarwate:
What do you see as the key challenges for FMCG companies like yours in the next few quarters?
The challenge would center around a couple of things. First, the sector as a whole, may have to come out of some kind of rut, in which it was until a few years ago. I think the challenge is to maintain the momentum and keep the consumer sentiment alive.
We are seeing a period of good economy growth and the sector must capitalise on that and second part of the innovation is the key to the first part. I think companies need to innovate and focus on consumers. In a tough period, there was an excessive
How do you combat margin pressures because that is showing up for many FMCG companies? The point that you made about competition; how much elbow room do you have for price increases at this point?
We are riding a good period almost for four-five quarters, where our margins have continuously expanded. We believe that in terms of our competitive scenario, we are well-placed at this point of time. Not that we are relaxing; but in terms of our pricing power, it has held quite well over the past 18 months or so.
Out of our turnover increase of 38% including this quarter, almost 37% has come from volume. So we have not had inflationary growth. We have not been required to raise prices but we have held prices despite the underlying material prices that have gone down.
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