Dabur faces short-term sales dip in Q2

New Delhi: Packaged goods maker Dabur on Tuesday said it faced "short-term moderation in sales" in the September quarter on account of tax cuts.The maker of Real juice and Vatika shampoo said the moderation was because consumers deferred buying as they awaited goods and services tax -linked price cuts. Distributors and retailers, too, focused on liquidating existing higher-priced inventory, the company noted in its quarter update.At a consolidated level, Dabur said it expected revenue to grow in the mid-single digits and operating profit to grow almost in line with revenue.The company said the brands that were not impacted by GST cuts, such as honey, Anmol Coconut Oil, Gulabari and Hajmola Zeera, performed well."Retail offtakes continued to be resilient, enabling us to sustain market share gains in over 90% of our portfolio," it said."Dabur's key categories like oral care, juices, hair oils, shampoo, digestives, OTC, branded ethicals and culinary, which represent approximately 60% of our India business, will benefit from GST rate cuts to 5%. Now 85% of our portfolio is at a GST rate of 5%, which is a key positive," it said.Dabur's beverage portfolio, however, was impacted due to the higher-than-expected rainfall and floods in July and August. This includes Real fruit juices and coconut water.Under GST reforms, daily essentials such as soaps, shampoos, toothpastes, talcum powder, hair oils, biscuits, snacks and bottled water now attract 5% GST.Late last month, Hindustan Unilever (HUL) flagged in an update that it expected a short-term impact on sales in the September quarter on account of the GST 2.0 reforms.The maker of Pears soap and Red Label tea said there has been a lag of new orders by trade in clearing existing stock and delayed pantry buying by consumers, in expectation of GST-linked lower prices.HUL said in its update that it expected near-flat to low single-digit growth for the quarter, with trade disruptions continuing into October. The company said 40% of its overall portfolio was now in the GST slab of 5% compared with 12% or 18% earlier.

from Economic Times https://ift.tt/hfLnGKF