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    Gillette India

    GILLETTEGood
    Fast Moving Consumer Goods·18 Sept 2024
    Management Summary

    Gillette India delivered a strong performance for the fiscal year ended June 30, 2024, characterized by balanced top-line and bottom-line growth. The company successfully navigated a shifting male grooming landscape (the 'beard culture') by pivoting towards styling and premium tools like Gillette Labs. Despite competitive pressures in the entry-tier Oral Care segment, the company maintained its market leadership through productivity-led reinvestment in product superiority and digital-first distribution strategies.

    Highlights

    8

    • Delivered annual sales of ₹2,633 crore, representing a 6% YoY growth.

    • Profit After Tax (PAT) reached ₹412 crore, up 16% YoY, driven by topline growth and innovation.

    • Structural margins improved by 200 bps, supported by productivity interventions and premiumization.

    • Achieved productivity savings of over ₹45 crores during the fiscal year.

    • Grooming segment accounts for 80% of the company's business salience.

    • Distribution reach and coverage expanded by over 1.5x in the last 3 years.

    • Venus (Female Grooming) business has doubled in the last 5 years.

    • Appliances (Braun) currently contribute 2% of the category in India.

    Concerns

    1

    • Declining rural wages and rising unemployment

    Key financials

    Single quarter

    05 metrics
    1. 01Revenue₹2,633 Cr+6%YoY
    2. 02PAT₹412 Cr+16%YoY
    3. 03Structural Margin Improvement200 bps
    4. 04Productivity Savings₹45 Cr
    5. 05Grooming Segment Salience80%

    Segment breakdown

    Grooming
    80% Business Salience₹3,300 Cr Category Size5% Category Growth
    Oral Care
    15% Criss Cross Segment Growth100 Toothbrush Only Category Scope
    Appliances
    2% Category Contribution
    List

    Guidance & targets

    2
    CategoryTargetPriority
    Market Share
    Oral Care Category Growth
    mid-single digits
    		Medium
    Volume
    Rural Demand Trend
    keep up with positive trends
    		Medium

    Risks & concerns

    4
    RiskSeverity

    Declining rural wages and rising unemployment

    Management identified these as key 'watchouts' that could impact consumption trends despite positive monsoon data. — Management acknowledged

    high

    Competitive activity in entry-tier Oral Care

    Intense competition in the mass toothbrush segment has slowed growth, forcing a focus on premium niches. — Management acknowledged

    medium

    Volatile macro dynamics

    Expectation of continued volatility in the global and domestic economic environment. — Management acknowledged

    medium

    Areas of Evasion(1)

    • Refused to share specific revenue mix and sub-segment shares due to competitive reasons.

    Q&A highlights

    3

    “The trend is shifting towards more men now preferring to grow beards... this presents an opportunity for us to position our premium systems, appliances, and trimmers to delight consumers for this new set of jobs.”

    Confirms management's strategy to offset potential shaving frequency declines by premiumizing the styling and shaping category.

    asked by Mehul Savla, Ripplewave Equity Advisors LLP

    2 min read5 chapters

    Detailed Narrative

    01

    Fiscal Year 2023-24 Financial Performance

    Gillette India reported a robust fiscal year with sales of ₹2,633 crore, a 6% increase YoY. Profit After Tax (PAT) grew significantly faster at 16%, reaching ₹412 crore. This bottom-line outperformance was driven by a combination of top-line growth, product innovation in premium segments, and a strong focus on productivity, which yielded over ₹45 crore in savings.

    02

    Strategic Pivot in Male Grooming

    Management addressed the evolving 'beard culture' by repositioning its portfolio. Instead of viewing beards as a threat to shaving, the company is targeting the 'new job' of grooming, styling, and shaping. The Gillette Fusion portfolio has been redesigned as a beard styling tool, and the launch of Gillette Labs (a super-premium razor) aims to transform shaving into an extraordinary experience, helping maintain market leadership in a category valued at ₹3,300 crore.

    03

    Oral Care: Premiumization Strategy

    While growth in the Oral Care segment has been slow due to entry-tier competition, the company is successfully growing its premium 'Criss Cross' sensitive range at a double-digit rate. Gillette clarified that it only operates in the toothbrush segment in India. The strategy involves upgrading packaging to reduce shelf clutter and accelerating the trial of power brushes (Oral-B iO) to drive higher value per user.

    04

    Operational Excellence and Productivity

    Productivity is described as a 'muscle' fully embedded in the operating model rather than just cost-cutting. The company achieved a 200 bps improvement in structural margins this year. These savings are being reinvested into the 'five vectors' of superiority: product, package, brand communication, retail execution, and value, ensuring long-term competitiveness.

    05

    Distribution Expansion and Digital Transformation

    The company's distribution reach has grown 1.5x over the last three years. A key driver is the 'Supply 3.0' journey, which uses AI and machine learning for store-level planning rather than cluster-based planning. This has resulted in 60% fewer touchpoints in the supply chain and helped storeowners optimize inventory by reducing non-moving stock.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.