Hindustan Unilever (HUL) reports on the impact of recent GST reforms. While positive long-term, the changes caused short-term disruption as distributors cleared inventories with old prices. This led to delayed orders and reduced consumer spending in September. HUL expects near flat to low-single digit consolidated business growth for Q2 2025, with recovery anticipated starting in November as prices stabilize.
GST Reform Impact
Recent GST reforms are viewed as a positive step by the Government to drive consumption. Approximately 40% of Hindustan Unilever’s (HUL) portfolio, including items like Toilet Soap, Toothpaste, Shampoo, Hair Oil, Talcum Powder, and Lifestyle Nutrition, now benefits from a reduced GST rate of 5%. This is down from prior rates of 12% or 18%.
Short-Term Disruption
While beneficial long-term, the GST changes caused a transitory impact. Distributors and retailers across channels sought to clear existing inventories with old prices. Consumers postponed ordering, awaiting new stocks with updated prices. This resulted in lower orders across the portfolio, impacting sales in September.
Outlook and Recovery
HUL anticipates near flat to low-single digit consolidated business growth for the quarter ending September 30, 2025. Recovery is expected to begin in November as prices stabilize, supported by rising disposable incomes. The company continues to pursue portfolio transformation actions.
Source: BSE
