Advertising
Layoffs in Adland: Omnicom's acquisition of IPG nears finish line. But at what human cost?
Hindustan Unilever expects flat Q2 growth as GST transition disrupts orders
Hindustan Unilever expects flat to low-single digit growth in the September quarter as GST rate cuts triggered short-term distributor disruptions, though the company expects demand to rebound from November.
Hindustan Unilever Ltd., India’s largest consumer goods company, said on Friday that the rollout of new goods and services tax (GST) rates has weighed on short-term sales, even as it expects the reforms to lift demand over the long term.
The maker of household staples such as Lux soap, Surf Excel detergent and Ponds cream reported “near flat to low-single digit” business growth in the September quarter, attributing the slowdown to order delays as distributors and retailers cleared out old inventories.
The transition has been marked by “disruption at distributors and retailers” across channels, the company said in a regulatory filing. “This has resulted in postponement of ordering in anticipation of receiving new stocks with updated prices and lower orders across the overall portfolio as consumers delayed their pantry buying,” HUL added.
The disruption, HUL noted in an exchange filing, was likely to spill into October. “Given our existing pipeline inventory in the channels, we expect this impact to continue into October as well,” the company said. Still, it forecast a recovery starting in November, citing stabilizing prices, higher disposable incomes and ongoing changes in its product portfolio.
The government’s tax overhaul, effective Sept. 22, reduced the GST rate on a range of daily essentials to 5 percent. HUL said the revisions would benefit about 40 percent of its portfolio, which includes categories such as soap, toothpaste, shampoo, hair oil, talcum powder, nutritional supplements and packaged foods.
“Due to the aforesaid context, we expect the consolidated business growth to be near flat to low single digit for the quarter ending September 30, 2025, based on current view,” the company said, characterizing the weakness as a one-off and “transitory” impact.
HUL also called the reforms a “positive step” by the government to drive consumption. “HUL remains committed to supporting the government’s efforts by ensuring that the GST benefits are being passed on to consumers through competitive pricing and enhanced value across a wide range of products from 22nd September onwards,” it said.
SPOTLIGHT
According to LinkedIn’s research with over 1,700 B2B tech buyers, video storytelling has emerged as the most trusted, engaging, and effective format for B2B marketers. But what’s driving this shift towards video in B2B? (Image Source: Unsplash)
Read MoreExplained: Standing Committee’s draft report on India’s fight against Fake News
India’s parliamentary panel warns fake news threatens democracy, markets and media credibility, urging stronger regulation, fact-checking, AI oversight and global cooperation.