Consumer demand to improve in couple of quarters: Sanjiv Puri

The COVID-19 pandemic and the inflationary cycle that followed, have crippled the growth of the consumer goods majors in India over the past three-to-four years. Despite an initial bump in demand for goods post the first set of lockdowns in 2020, the changing geopolitical landscape and trade obstacles have shot up prices of raw materials, leading to a spiral that has impacted consumer demand - especially in rural India.

That, however, is nearing its fag end and demand may soon come back, feels Sanjiv Puri, Chairman & Managing Director of ITC. Talking at the Business Today Mindrush event today, Puri says that another round of good crops will help the recovery in demand in 2024.

“I am quite optimistic about the opportunities going forward - most certainly in the medium term. And very very glad in the way the economy has performed and stayed resilient. In the short term, there is a gap between where we expect the consumption demand to be in India and what it is today. But we must look at it from the context of the problems that we have faced. The economy has gone through COVID [pandemic], it has gone through the the worst of inflations. Everything has got expensive because of the geopolitical scenario. The rural economy is hit by extreme weather events, the crops have not performed to the [desired] levels. All of these have certainly impacted the sentiment and income levels in the short-term,” he says. 

But a lot of timely measures taken by the government like the revision of minimum support prices of crops, “thrust on public digital and physical infrastructure, focus on FPOs (farmer producer organisations), [use of] technology in agriculture - a lot of positives are there. The fact of the matter is despite all these problems we are still growing, while the rest of the world is struggling to grow. We must look at it from that context,” Puri explains, adding “It just that cost of the product has gone up quite more than how incomes have progressed. There could be a little lag in demand coming back but, I think, in a couple of quarters [the situation] will be much better.”

Puri, an ITC veteran with over 30 years of experience, took charge of the diversified company as its CEO in early 2017 and re-designated as the Managing Director in May 2018. In May 2019, a year ahead of the pandemic, Puri was also appointed as its chairman. His tenure at the top office, has been marred by macro-economic uncertainties and geopolitical tensions. Despite those, ITC has managed to grow at a rapid pace.

Looking back at his tenure, Puri reflected that the “uncertainty” that has panned out in the last few years has created a macro environment that the businesses had never faced before. And the situation is changing very fast. “So, I must say that it [the situation] has been very challenging for businesses. But it [the journey] has been very encouraging and fulfilling. Despite all these challenges, which have devastated economies in many parts of the world, India has been very resilient. It's rightly said that [it is] India’s moment.”