HUL said the GST rate revision led to lower orders in September as distributors cleared old inventory, but expects demand to recover from November.
Shares of Hindustan Unilever (HUL) fell almost 1% on Monday as the company reported that its September-quarter performance will be impacted by the recent GST changes.
The company expects overall growth for the quarter to be flat to low single digits, but called the slowdown temporary. HUL said it anticipates demand to pick up from November once prices stabilise and new stocks reach stores.
The FMCG giant said that nearly 40% of its well-known brands, including those for soaps, shampoos, toothpaste, and hair oils, have been moved to the lower 5% GST slab, compared with the earlier 12% or 18% rate. HUL added that it has passed on these tax cuts to consumers through reduced prices, effective from September 22.
GST Cuts Slow Sales Temporarily
While the lower GST is expected to lift household spending and boost long-term demand, it temporarily slowed sales as distributors and retailers delayed new orders to clear older stock first.
“This has led to a short-term impact on sales for the company in September. Given our existing pipeline inventory in the channels, we expect this impact to continue into October as well,” HUL said.
Brokerage View
Brokerage firm Jefferies retained its ‘Buy’ rating on the stock with a price target of ₹3,000, implying a 20% upside. It said the GST rate cuts are a long-term positive for the company, even though short-term sales were affected by destocking and delayed pantry purchases.
Jefferies also noted that the same trend is visible across other FMCG peers and expects the sector to bounce back as festive demand builds.
SEBI Analyst View
SEBI-registered analyst Prabhat Mittal said that after reaching a high of ₹3,035 on September 23, 2024, the stock corrected to ₹2,199 on March 3, 2025, before forming higher tops and bottoms on the short-term chart.
In September, it corrected by more than 10% from ₹2,750. He identified ₹2,398 as a major support level and noted that the stock is forming a rounding bottom pattern on the medium-term chart, which he said is a positive sign.
Mittal suggested that traders consider buying HUL at around ₹2,500 for the short to medium term, with a strict stop-loss below ₹2,390 and targets of ₹2,700 and ₹2,800.
What Is The Retail Mood?
On Stocktwits, retail sentiment for HUL was ‘neutral’ amid ‘normal’ message volume.
HUL’s stock has risen 7.1% so far in 2025.
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