Gillette India: P&G Bangladesh terminated the distribution agreement effective Dec. 31

Gillette India can retain a high degree of autonomy and control while simultaneously taking advantage of the knowledge and assets of its parent company, P&G, thanks to this ownership structure. The promoter group’s resolute support affords stability and support to the company’s operations, freeing it to concentrate on innovation and growth within the fiercely competitive consumer goods market. Gillette India has become a reputable brand among Indian consumers by emphasizing grooming and dental care products. Over the years, the company has maintained a strong market presence and developed a devoted customer base thanks to its dedication to quality and innovation. Gillette India can stay ahead of market trends, launch new products, and increase its presence throughout India by utilizing P&G’s extensive global network and resources. In the quickly growing consumer goods sector, this strategic alliance has benefited both businesses by fostering growth and success. Public shareholders hold 25% of the company’s equity, while the promoter group owns the remaining 75%. Members of the promoter group include Gillette Diversified Operations and Procter & Gamble Overseas India Holdings BV. Its products are sold through several retail channels, including membership clubs, mass merchandisers, drugstores, department stores, convenience stores, and grocery stores. Gillette has its manufacturing facilities in Bhiwadi, Rajasthan, and Baddi, Himachal Pradesh. There are also third-party manufacturing sites spread throughout India.

Procter & Gamble Bangladesh and Gillette India terminate their distribution agreement:

In intraday trade, Gillette India’s share price fell 3% to Rs 8,501.10 per share on the BSE. The personal care company announced in an exchange filing that Procter & Gamble Bangladesh, one of its distributors, had terminated a distribution agreement with the company, effective December 31, 2024. This was the reason for the action taken. “The company will experience a commensurate decline in net sales under this agreement as a result of this termination. The net sales made through the aforementioned distributor agreement made up 2% of the company’s total net sales for the fiscal year 2023-2024. The company stated in an exchange filing that this termination has no discernible effect on its profits.

A financial status update from Gillette India:

For the June quarter, Gillette India’s profit after tax (PAT) increased by 26.4% to Rs 115.97 crore. The business, which uses the July–June fiscal year, declared a profit of Rs 91.75 crore for the previous quarter. From Rs 619.44 crore in the same period last year to Rs 645.33 crore during the quarter under review, its operating revenue climbed by 4.17%.

The stock of Gillette India Limited is down 3% intraday:

Gillette India Limited’s stock is currently trading at Rs. 8,520.50 per share, a 3% decrease, as a result of P&G Bangladesh Private Ltd terminating the company’s distribution agreement with effect from December 31, 2024.

Conclusion: Procter & Gamble Bangladesh and Gillette India will have an impact on Gillette India’s sales and revenue in the upcoming fiscal year, but the company will quickly find a solution and enter into a long-term contract with another company.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.