New Delhi, February 18: Citing noteban’s “significant impact” on business in the last quarter of 2016 in India, the food-and-beverage giant Pepsico’s India-born CEO Indra Nooyi said there are still “lingering effects” of demonetisation and she hopes normalcy may roll out by the end of second quarter this year.
Nooyi while attending a call to Pepsi’s fourth quarter earnings said, “On demonetisation, across the board for pretty much all of industry, and CPG (Consumer Packaged Goods) in particular because it hit the individual retailer significantly, demonetisation had a significant impact on our India business in Q4,”
PepsiCo’s net income has fallen 18 per cent to $1.40 billion in the quarter ended December 2016.
While answering whether demonetisation had any impact on Pepsi’s beverage or snack business, Nooyi said there are still some “lingering effects” from the Indian government’s decision to withdraw high-value banknotes of Rs 1,000 and 500 from circulation.
In the call that was attended on February, she also added “not sure we are totally out of the woods.”
On the outlook for the current year, Nooyi said the company expects “solid financial performance despite anticipated continued macroeconomic challenges.”
Nooyi said demonetisation was a “massive change” and its implementation too had its “share of challenges” but at the same time she hopes things will return to normal by the second quarter that will end in June this year.
“So our hope was that by the time Q2 rolls by we would be through the bulk of the demonetisation challenges and the new currency and the digital currency will be back in circulation and we will be back to retail activity coming back to normal,” Nooyi said.
It has been more than 100 days since Prime Minister Narendra Modi had withdrawn from circulation the high-value currency notes of 1,000 and 500. Following the noteban, remonetisation was quite slow in the economy and severe cash crunch affected business in the country.