Gillette India shares trade over 2% lower as Bangladesh distributor terminates agreement

Gillette India’s shares were trading lower on Wednesday after the company announced that it received a letter from its distributor, Procter & Gamble Bangladesh, which intimated to the company about the termination of the distribution agreement. The termination will be effective from December 31, 2024. Shares of the company were down 2% at ₹8,600 per share.

Gillette informed that as a result of the termination of the distribution agreement, the company will witness a proportionate drop in net sales. In FY24, the net sales through the distributor agreement accounted for 2% of the total net sales of the company. However, the termination of the agreement will not have a material impact on the company’s profits.

For the quarter ended June 30, 2024, Gillette India reported a 4% year-on-year (YoY) rise in sales to ₹645 crore. The company’s net profit for the quarter jumped 26% YoY to ₹116 crore. The company credited strong brand fundamentals and improved retail execution for the growth in net profit.

For the financial year ended June 30, 2024, the company saw a 6% YoY rise in sales to ₹2,633 crore while net the company clocked in a net profit growth of 16% YoY to ₹412 crore. The company stated that it faced hurdles due to the operating and competitive environment.

V Kumar, managing director of Gillette India, said that the company saw growth in its top-line and bottom-line figures due to the company’s integrated strategy, brand communication, and strong execution. He stated that strong results are the product of the company’s strategy and that it will stick to it going forward. “We remain committed to – a focused product portfolio of daily use categories where performance drives brand choice, superiority (of product performance, packaging, brand communication, retail execution, and consumer and customer value), productivity, constructive disruption, and an agile and accountable organisation,” he said.

The company's shares have risen by nearly 33% since the beginning of the year, and the stock has gained over 43% in the past year.