By Aroosa Ahmed
Copyright thehindubusinessline
Low demand and the transition to new Goods and Services Tax (GST) rates is seen to have a negative impact on the sales of fast-moving consumer goods (FMCG) companies that are expected to report subdued performance in the September quarter.
Hindustan Unilever Limited (HUL) on Friday stated that GST 2.0 will impact the company’s sales and result in near flat to low-single digit growth for the quarter ending September 30. The stock fell nearly 3 per cent intra-day before pulling back at day’s close.
According to distributors, the sales were impacted between September 1 and September 17, when retailers had stopped purchasing to exhaust old inventory, and distributors were trying to liquidate their existing inventory.
“As the GST reforms were announced, there was panic among the retailers for the first 15 days. They were not purchasing while distributors were trying to liquidate. FMCG companies also slowed down releasing their products and later announced discounts on the old stocks. There will be an overall impact on the sales of the FMCG makers during this quarter with multiple factors acting as a deterrent,” Praful Punamchand Jain, an FMCG distributor based in Maharashtra, told businessline.
Further, the FMCG sales were also impacted due to low demand witnessed in July and August owing to heavy rainfall across the country.
Sales pick-up
“There has been a pick-up in sales after the GST 2.0 was implemented. However, there has been an overall impact on sales owing to multiple factors, including persistent rainfall going uptill September end. FMCG companies overall will see repercussions this quarter. The next quarter will be good as the healthy sales are likely to continue until Diwali,” said Dhairyashil Patil, National President, AICPDF (All India Consumer Products Distributors Federation).
Around 40 per cent of HUL’s portfolio, including toilet soap, toothpaste, shampoo, hair oil, talcum powder, lifestyle nutrition and other foods, now benefits from a reduced GST rate of 5 per cent, down from the previous 12 per cent or 18 per cent
“While this measure supports long-term consumption, we have seen a transitory impact in the form of disruption at distributors and retailers across channels to clear existing inventories with old prices. This has resulted in the 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. This has led to a short-term impact on sales for the company in September. Given our existing pipeline inventory in the channels, we expect this impact to continue into October as well. We expect the consolidated business growth to be near flat to low single digit for the quarter ending 30th September 2025, basis the current view,” HUL informed the stock exchanges.
Published on September 29, 2025
