desk
Share
News Topical, Digital Desk : Hindustan Unilever Limited (HUL) released a business update on Friday ahead of its second-quarter results. The company said it has begun passing on the benefits of the GST reduction to its customers. The GST rate has been reduced to just 5% on approximately 40% of its portfolio. The company said this includes soap, shampoo, toothpaste, talcum powder, herbal oils, and other food products. However, consolidated growth is expected to remain flat or in the low single digits in the September quarter.
Recovery expected from November
The company also stated that a recovery is expected from November once prices stabilize. The company stated that the recent GST reforms implemented by the government are a positive step towards boosting consumption. Under these reforms, the GST rate on approximately 40% of HUL's products has been reduced from 12% or 18% to only 5%. HUL stated that these reforms will increase consumer spending power and strengthen long-term demand. Short-Term Disruption The company stated that, however, during this transition, short-term disruptions were observed at the distributor and retailer level, as trade partners were able to stock products at new prices only after clearing old inventories. This led to lower orders in the channel, and consumers also postponed pantry purchases in anticipation of lower prices. "Given the current inventory in the channels, we expect this impact to continue until October," the company said. Due to this, HUL indicated that overall business growth in the September quarter would be almost flat or close to low-single digits. HUL also reiterated that its ongoing portfolio transformation measures would support demand in the coming months. Stock Performance The company's stock closed at Rs 2,512 on Friday, down 1.04 per cent. In the last one year, the company's stock has seen a decline of 15.88 per cent.
--Advertisement--
