HUL sees near-flat Q2 growth as GST rate cuts disrupt September sales

Hindustan Unilever Ltd (HUL) on Friday issued Q2 FY26 business update highlighting both the opportunities and near-term challenges stemming from the latest GST reforms.

With effect from September 22, about 40% of its portfolio — spanning soaps, toothpaste, shampoos, hair oils, talcum powder, lifestyle nutrition and other foods — now attracts a lower GST rate of 5%, compared with the earlier slabs of 12% or 18%.

The company said it has already passed on these benefits to consumers through sharper pricing and better value across categories.

While these measures are expected to support long-term demand and increase disposable incomes, HUL noted short-term disruption in September.

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Distributors and retailers sought to clear old inventories at higher prices, delaying fresh orders, while consumers also postponed pantry purchases in anticipation of cheaper stock. This led to a temporary slowdown in sales, which the company expects will continue into October given existing pipeline inventory.

On this backdrop, HUL said it expects consolidated business growth for the September quarter to be near flat to low-single digit.

The company termed the impact transitory and said it anticipates recovery from November, aided by stabilising prices, rising disposable incomes and its ongoing portfolio transformation initiatives.