Great Expectations On P & G

The turnaround in stock and analyst sentiment is basically in anticipation of the new products to be introduced in the Indian markets in the next two years. Pankti Bhansali, an analyst at brokerage house P R Subramanyam, points out that after testing the market with new products like Head & Shoulders shampoo, the parent, P&G (USA), is likely to add nearly 17-18 different products in India.

Among the major products slated for introduction in the near future are: Crest - a new brand of toothpaste, Tide - a new detergent and the Max Factor range of cosmetics.

Recently, P&G commissioned its Goa plant for the Vicks line of products to meet the requirements of the export market. The company plans to further extend its Goa plant range for feminine hygiene products, the benefits for which are expected to come in 1998. In the feminine hygiene care segment, P&G is already the market leader with a 44.6 per cent share as against the 28.4 per cent by Johnson & Johnson.

 

Analysts point out that even if the parent introduces products through its 100 per cent subsidiary (P&G Home Products), P&G India would still benefit as it will be manufacturing the items. Since margins are much higher in manufacturing than in marketing and distribution, P&G India stands to gain most when the parent introduces new products.