Hindustan Unilever Limited shares declined 0.48 per cent to ₹2,499.70 on Monday afternoon, following the company’s disclosure of near-flat to low single-digit growth expected for the September quarter. The stock touched an intraday low of ₹2,443 before recovering marginally.
In a regulatory filing on September 26, HUL attributed the subdued performance to disruption caused by recent GST rate cuts implemented by the government.
While the reforms reduced GST rates to 5 per cent from 12-18 per cent on approximately 40 per cent of its portfolio including soaps, toothpaste, and shampoo, the transition created short-term operational challenges.
The company stated that distributors and retailers are clearing existing inventories with old prices, leading to postponed orders and delayed consumer purchases. This disruption has impacted September sales and is expected to continue through October due to pipeline inventory.
Brokerages offered mixed reactions to the update. Morgan Stanley maintained an Equal Weight rating with a target price of ₹2,335, noting the performance is below market expectations. Jefferies retained its Buy rating with a ₹3,000 target, expecting similar impact across FMCG firms. Bank of America kept a Neutral stance at ₹2,840, calling it an “unexciting quarter.”
HUL management anticipates recovery from November onwards as prices stabilize and disposable incomes rise. The company emphasized this is a one-off transitory impact and remains committed to passing GST benefits to consumers through competitive pricing.
