Wipro Consumer Care and Lighting Acquired Philippines-based S Brands.

S Brands is a personal care portfolio of leading brands in the sector. The portfolio brands under S Brands consists of KeratinPlus which is the major value driver of the company, DeoPlus, AlcoPlus, Empress, and Fiona cologne all part of the personal care segment, with each brand a leader in their niche categories. S Brands has a 45% market share in this category.

This deal is expected to surpass the Rs. 1000 Cr. revenue contribution mark from Philippines for Wipro. 49% of the total revenue generated by Wipro is contributed by India with major contribution in remaining 51% being done by Philippines after the second acquisition in the country, then Malaysia and China.

Risks
70% of Wipro's business comes from soaps which is dependent on palm oil, hurting business due to west Asia war. Palm oil is derived from Crude oil whose supply is limited as a result of blockage due to choking of the Strait of Hormuz that occurred due to onset of the west Asia war in Feb-end till date. Hence, the input price inflation for the company is expected to stay volatile in the near future.

Growth
The Indian Household and Personal care market is expected to reach USD 39.76 Bn by 2035 at a CAGR of ~15%, driven by rising disposable incomes, rapid urbanisation, growing hygiene awareness and expanding e-commerce penetration, with consumers shifting towards product premiumisation and branded products.
Globally the sector is currently valued at USD 487.97 Bn and expected to reach a value of USD 757.17 Bn by 2035, growing at a projected CAGR of 5%.

The Indian Hair Treatments and Hair care market is expected to grow at a CAGR of 4.5% to a value of USD 6700 Bn by FY2035.
Globally the sector is currently valued at USD 111.3 Bn in 2026 which is expected to grow at a CAGR of 5.5% to a value of USD 168.8 Bn by 2035

The Household and Personal care segment is expected to become a $5-6 Billion market and Niche Hair treatments segment is projected to become a $100 Million market.

The company plans to replicate these results in Vietnam.

As per my rationale, the acquisition of S Brands is a commendable strategic move. Because given the macroeconomic headwinds and geopolitical tensions affecting the business, it is the right time to diversify towards other categories of the business and not to stay invested in the concentrated soaps market as it could get risky in future and could even have an adverse impact on the company's cashflows in the bear case. Also, the growth prospects in the hair treatment and personal care segment are expected to yield high returns over the next decade, given the rising preference of consumers towards hygiene, awareness and premiumisation at the back of rising incomes. Also, not just in India but the growth sentiment looks positive at a global scale as well.