HUL shares fall over 2.7% as Q2 FY26 update dents sentiment; Marico, Britannia, and Nestlé India also follow suit; check details

The stock of HUL declined as much as 2.73% to ₹2,443 on the NSE in the early trade. The NIFTY FMCG index was also trading around 1% lower. Out of 15 constituents, 10 were trading in the red. Apart from HUL, other stocks that were trading with notable cuts were Britannia, Nestle India, and GCPL.

HUL said that the latest GST reforms are a positive step by the government to drive consumption; however, this has caused a transitory impact in the form of disruption at distributors and retailers across channels to clear existing inventories with old prices.

This, HUL said, has resulted in postponement of ordering in anticipation of receiving new stocks with updated prices and lower orders across the overall portfolio as consumers delayed their pantry buying.

"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.

Due to the aforesaid context, the FMCG major expects the consolidated business growth to be near flat to low single-digit for the quarter ending 30 September 2025, based on the current view.

"This is a one-off, transitory impact, and we anticipate recovery starting in November as prices stabilise, underpinned by rising disposable incomes and our ongoing portfolio transformation actions," the statement said.

HUL stated that with the revised GST rates, approximately 40% of its portfolio, including toilet soap, toothpaste, shampoo, hair oil, talcum powder, lifestyle nutrition and other foods, now benefits from a reduced GST rate of 5%, down from the previous GST rates of 12% or 18%.

HUL added that it remains committed to supporting the government’s efforts by ensuring that the GST benefits are being passed on to consumers through competitive pricing and enhanced value across a wide range of products from September 22 onwards.

These reforms are expected to increase disposable income and drive long-term demand across key categories, it added.

GST rate rationalisation

In a bonanza to consumers, the GST Council, comprising the Centre and states, on September 3, 2025, announced the reduction in the tax rates on goods and services, from September 22 -- the first day of the Navaratri.

The GST will now be a two-tier structure wherein the majority of goods and services will attract a tax of 5% and 18%. A 40% tax will be levied on ultra-luxury items, while tobacco and related products will continue to be in the 28% plus cess category.

Till now, Goods and Services Tax (GST) was levied in 4 slabs of 5, 12, 18 and 28%. Besides, a compensation cess is levied on luxury items and demerit or sin goods.

Mass consumption items such as ghee, paneer, butter, 'namkeen', ketchup, jam, dry fruits, coffee and ice cream, and aspirational goods like TVs, ACs and washing machines will become cheaper.

Fast-moving consumer goods (FMCG) products such as hair oil, soap, face powders, shampoos, toothbrushes, and toothpaste, along with all food items, have come under the lower slab of 5% from 18%. It has also reduced duty on room AC and TVs above 32 inches to 18%.