FMCG major Dabur said GST will leave a short-term adverse impact on its sales and profits due to destocking at trade channels but the tax reform will be beneficial in the ‘medium-to-long run’.
According to a PTI report: However, the home-grown FMCG firm said it was difficult for the company to quantify the impact at this point.
“Although the positives of GST is likely to be felt in medium and long run, the company is likely to experience near term adverse impact on its sales and profits, due to destocking at trade channels and other related transition costs,” Dabur said in a regulatory filing.
It further said, at this transition phase, it is difficult to quantify the impact but the situation is temporary and as soon as the impact of GST is absorbed in the economy, it will normalise.
FMCG firms are preparing for reduced stocks in their trade channels for a couple of months as anxious dealers cut down inventory levels in the run up to GST, the new indirect tax regime, from July 1.