Hindustan Unilever Limited (HUL) shares fell by 0.48 percent to ₹2,499.70 on Monday afternoon, following the company’s announcement of anticipated near-flat to low single-digit growth for the September quarter. The stock reached an intraday low of ₹2,443 before experiencing a slight recovery.
In a regulatory filing dated September 26, HUL attributed this subdued performance to disruptions stemming from recent Goods and Services Tax (GST) rate cuts enacted by the government. The reforms reduced GST rates from 12-18 percent to 5 percent on approximately 40 percent of HUL’s product portfolio, which includes soaps, toothpaste, and shampoos. However, the transition has led to short-term operational challenges.
The company reported that distributors and retailers are working through existing inventories priced under the previous GST rates, resulting in postponed orders and delayed consumer purchases. This disruption has adversely affected September sales and is expected to linger into October as pipeline inventories are cleared.
Reactions from brokerages have been mixed. Morgan Stanley maintained an Equal Weight rating and set a target price of ₹2,335, citing that the performance fell short of market expectations. Conversely, Jefferies retained its Buy rating with a target price of ₹3,000, predicting a similar impact across the fast-moving consumer goods (FMCG) sector. Bank of America adopted a Neutral stance with a target of ₹2,840, describing the quarter as “unexciting.”
HUL’s management anticipates a recovery beginning in November, as pricing stabilizes and disposable incomes rise. The company reassured stakeholders that this situation is a temporary, one-off impact and emphasized its commitment to passing on GST benefits to consumers through competitive pricing.
