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Reckitt’s base effect GST boost in India to unwind in Q4, says CEO

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Reckitt’s base effect GST boost in India to unwind in Q4, says CEO

Reckitt’s base effect GST boost in India to unwind in Q4, says CEO

Reckitt's India operations showed strong growth momentum in the July-September quarter compared to the previous year. The prior year was affected by GST-related stock depletion, leading to a more favorable comparison now. Specifically, the company reported double-digit growth for brands like Dettol, Durex and Harpic. Reckitt is also focusing on enhancing execution through AI-enabled sales transformation in India.

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New Delhi: British consumer healthcare company Reckitt ’s India operations reported “strong growth momentum” in the July-September quarter, compared with a year earlier when stock depletions following GST rate revisions hit performance, chief executive Kris Licht said. The base-effect benefit is expected to dissipate now, he said.

“The prior-year period was impacted by GST-related stock depletion, creating a favourable lap which is expected to unwind in Q4,” Licht said, at the company’s post-earnings investor call on Tuesday.

Last year in September, India slashed goods and services tax on most packaged consumer goods, including soaps, snacks, noodles and toothpaste, to 5% from 12% or 18%. While the GST reduction led to lower prices for consumers, the new tax regime caused significant trade and operational disruptions as companies had to replace existing stocks with packs with the lower price tags, resulting in temporary sales moderation.

Reckitt said emerging markets delivered 8% like-for-like net revenue growth in the third quarter ended September, and that growth was balanced between volume, price and mix, with India growing in double digits.


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