Dabur India flags short term sales disruption in Q2 FY26 amid GST changes

FMCG major Dabur India on Tuesday highlighted temporary disruptions in trade post GST Council’s September announcement as consumers deferred purchase to benefit from upcoming lower MRPs.

The GST Council announced major reducted in GST rates in the first week of September, which were set to be effective from September 22. The period between the announcement and implementation, the company witnessed trade disruptions as consumers deferred purchases and distributors, retailers also focused on liquidating the existing higher-priced inventory.

"This resulted in a short-term moderation in sales during the month of September and, consequently, in Q2 FY26," the company said in a statement.

"Despite these headwinds, our non-GST impacted brands like Dabur Honey, Anmol Coconut Oil, Gulabari and Hajmola Zeera have performed well," Dabur India said. "Retail offtakes continued to be resilient, enabling us to sustain market share gains in 90%+ of our portfolio."

A key positive in Dabur's business is its 85% portfolio falling under GST rate of 5%. "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 12%, 18% GST rate cut to 5%," it said.

Dabur India Q2 Growth Outlook:

• Consolidated revenue to grow in the mid-single digits
• Operating profit to grow almostin line with revenue.
• Oral care portfolio is likely to deliver double-digit growth
• Skin care portfolio is expected to grow in high-single digits, led by Gulabari and Oxy
• Shampoos to register high-single digit growth, led by Vatika
• Hair Oils is expected to report mid-single digit growth
• Culinary business is expected to record double-digit growth
• Activportfolio is expected to report robust growth of 30%+

The overall beverage portfolio of Dabur India was impacted amid higher-than-expected rainfall and floods in July and August. Also, its Nepal business was adversely impacted due to political unrest. "Consequently, we expect our overall international business to post mid-single digit growth in INR and CC terms," the company said.

The FMCG giant expects E-commerce (including Quick commerce) to grow in double digits. Key geographies like MENA, Turkey, Namaste and Bangladesh are expected to perform well.