P&G posted a 5.4 per cent rise in net profit to Rs 14.95 crore in the first quarter ended September 1999, compared with Rs 14.18 crore in the corresponding period last year. Net sales climbed up marginally to Rs 119.29 crore during the period against Rs 117.76 crore last year.

Operating profit is a tad up to Rs 24.46 crore against Rs 23.79 crore last year. Margins have remained constant with net margins at 12.5 per cent and operating margins at 20.5 per cent.

Interest charges at Rs 1.13 crore (Rs 1.04 crore) and depreciation at Rs 5.77 crore (Rs 5.66 crore) remain virtually unchanged. Provision for taxation is lower at Rs 2.77 crore against Rs 3.03 crore last year.

The P&G share price on the BSE closed at Rs 987 on Friday, Rs 11 lower than its previous close of Rs 998.

Commenting on the performance, company chairman and managing director Bharat Patel said: "The company has been able to hold its sales in the first quarter despite the continued slowdown in consumer demand. The overall health care and feminine hygiene markets have contracted considerably both in volume and value terms."

He said that in addition to the market slowdown, sales of Vicks Action 500 and Vicks Vaporub have been adversely impacted by surge in availability of counterfeit products.

At the company's 35th annual general meeting before convening the board meeting to announce the results, Patel told shareholders that P&G is planning to change its product packaging to keep at bay unscrupulous elements from imitating them.

To achieve this purpose, P&G is in consultation with Rhone-Poulenc which recently introduced bar-coding for its cough syrup brand Phensydl to fight against spurious products in the market.

He assured shareholders that strong legal action to stop infringer of its trademarks has been initiated. The company is also working in close contact with industry associations and drug authorities to put an end to such acts at the inception stage when the brand is registered.

Patel also said that P&G is relaunching the Vicks range under new packaging backed by a new advertising promotion in the next fortnight. The move is aimed at fighting the fresh surge in competition from D'Cold which has launched a strategic onslaught in advertising and promotion against Vicks.

'Focus on flexible

Procter & Gamble Hygiene and Health Care Ltd (P&G) aims at making its operations flexible and nimble so that it is increasingly responsive to the needs of the consumer, chairman and managing director Bharat Patel told shareholders at the company's annual general meeting here on Friday.

While warning that global competitors in healthcare and feminine hygiene categories are waiting in the wings to enter the Indian market with superior products based on latest technology, Patel said that P&G would have to react immediately to changes in product innovation and competition.

"P&G is positioning itself to face these challenges. The company has thus taken a conscious decision to focus on long term strategic benefits,'' he said.

Commenting on challenges in the new millennium, Patel said: ``The Indian market will offer a choice of world class products. Considering this, P&G has over the past two years restructured its operations.''