FMCG major Hindustan Unilever is expecting the rural demand to revive on good monsoon and loan waivers to farmers by some states.
Besides, HUL is looking up to its trade partners to soon attain “normalcy” post GST and is working closely with them to restore it.
“We are expecting rural demand to build back gradually and good monsoon would help in that direction. Rural demand has been on weaker side for last few quarters and we are hoping that with a good monsoon coming, it will turn,” HUL Chief Financial Officer P B Balaji said.
On the impact of GST on rural areas, he said: “Rural trade has more impact of GST in comparisons to the urban trade because they are taking time to understand it.”
Earlier, he said rural trade was growing faster than the urban but now it is almost growing at a similar level.
“… the fact is that loan wavers are happening, money would be in the hands of the rural people. Infrastructure investment, better support prices, these things should start putting money back in the hands of people,” said Balaji in a post earning conference.
According to Balaji, trade stocks are building back to normalcy post GST.
“We need to work with the trade to ensure whatever concerns they have and clarification they require. We are closely working with them to address it,” he said.
Large retailers as well as the modern trade retailers barring the first one week, most of them are back on track and they are buying normally.
However, CSD were of big concerns as they were out of market for almost 45 days and have started buying from last two three days only, he added.
“We have to work with them closely to ensure that they restock them as they would be running on a very thin pipeline,” he added.
Balaji said there are some confusion in the market at the level of small dealers and the company is helping them out.
“These are the priority for us for one month to ensure that it is sorted out and we are back in business as usual post GST as we were in pre GST,” Balaji added.
“The build up is expected to be gradual over the next few months because of the wholesellers. We need to carry them along and explain the situation and take them forward in the journey,” he said.