India's Godrej Consumer Products Ltd expects revenue to grow as much as 20% next year thanks to stronger demand for its mosquito-repellents, soaps and hair colours in smaller towns and villages, a top executive said.
The company, which is one of India's biggest consumer goods makers, had sales of 71.2 billion rupees ($1.14 billion) in the April-December period, or the first nine months of the current fiscal year.
Sales next year would be driven by a new range of affordable products targeted at rural markets, Vivek Gambhir, the managing director, said in an interview with The Wall Street Journal Thursday. Rural India accounts for about a third of the company's domestic sales.
Companies in India have been targeting consumers in rural parts of the country as higher incomes lead to increased spending, helping offset slowing demand in urban regions.
"A huge opportunity exists in India's villages," Mr. Gambhir said. "We are looking to tap into that space with innovative yet low-cost products."
Measures rolled out in the national budget Saturday, such as additional funding for a rural-employment program and efforts to make social-welfare programs more efficient, will further help increase incomes and boost demand, he said.
However, consumers in bigger cities will remain cautious about raising spending.
"There is no doubt that a gradual recovery is underway, but consumption in urban areas is still not at the levels we would expect."