Gillette India Expects Net Sales To Be Affected Due To Termination Of P&G Bangladesh Pact
In fiscal 2024, the distribution pact accounted for around 2% of the total net sales, Gillette India said.
Gillette India Ltd. on Tuesday announced that Procter & Gamble Bangladesh has terminated its distribution pact with the company with effect from Dec. 31, 2024.
"As a consequence of this termination, the company will have an impact of proportionate drop in net sales under this agreement," Gillette India said in an exchange filing. However, there is no material impact on the company’s profits due to this termination, it added.
In the financial year 2023–24, the distribution pact accounted for around 2% of the company's total net sales, the filing noted.
The reason behind the pact's termination was not mentioned in the regulatory filing.
The development comes in the backdrop of the political instability in Bangladesh casting a shadow on the prospects of several Indian consumer companies, including Emami Ltd., Marico Ltd., and Pidilite Industries Ltd.
Bangladesh accounted for 11% of Marico's consolidated business in fiscal 2024, whereas Emami derives 6% of its total revenue through sales in the country.
Other companies like Pidilite Industries, Jubilant Foodworks Ltd., Asian Paints Ltd. and Godrej Consumer Products Ltd. also have operations in Bangladesh.
Meanwhile, shares of Gillette India closed 0.51% lower at Rs 8,772 apiece on the NSE, compared to a marginal 0.01% rise in the benchmark Nifty 50. Year-to-date, the stock has logged gains of 36.1%.
Among two analysts tracked by Bloomberg, one has a "buy" rating on the stock, whereas another recommends to "hold." The average of 12-month analyst price targets implies a potential upside of 5%.
