Dabur India Ltd shares fell for third consecutive session on October 8 as the firm said deferred purchases ahead of lower GST rates led to moderation in Q2 sales.
Brokerage Nomura said it believes Dabur's underperformance against peers continues.
At 12 pm on October 8, Dabur India shares were trading 1% lower at Rs 487.45 apiece.
Dabur, on October 7, said it saw short-term moderation in sales during the second quarter as consumers deferred purchases and retailers rushed to liquidate higher priced inventory ahead of tax cuts.
CLSA said Dabur's Q2 consolidated revenue growth expectation is "relatively weak". The brokerage, however, expects overall FMCG sales to pick up in second half of FY26.
Investec said Dabur's Q2 volumes are likely to grow by flat-to-low-single digits.
The GST Council in early September decided to replace the four-slab structure of Goods and Services Tax with two broader rates of 5 and 18 per cent, putting most of the common-use items and food products under lower tax rate. The decision prompted consumers to delay purchases until the new rates took effect on September 22.
"This resulted in a short-term moderation in sales during the month of September and, consequently, in Q2FY26," the company said.
However, its 'non-GST impacted brands' like Dabur Honey, Anmol Coconut Oil, Gulabari and Hajmola Zeera have performed well.
"Retail offtakes continued to be resilient, enabling us to sustain market share gains in over 90 per cent of our portfolio," it said.
About GST rationalisation measure, Dabur said it's a landmark step towards driving affordability and enhancing purchasing power, which will boost consumption across categories and strengthen demand in both urban and rural markets.
"Dabur's key categories like oral care, juices, hair oils, shampoo, digestives, OTC, which represent approximately 60 per cent of our India business, will benefit from 12/18 per cent GST rate cut to 5 per cent. Now 85 per cent of our portfolio is at a GST rate of 5 per cent which is a key positive," it said.
Sharing sectoral updates, Dabur said its home & personal care, and oral care portfolio continued 'strong growth trajectory' and are likely to deliver 'double digit growth' in both Red Toothpaste and Meswak.
Its skin care portfolio is expected to grow in high-single digits led by Gulabari and Oxy franchise.
"In our hair care portfolio, we expect shampoos to register high-single digit growth led by Vatika while hair oils is expected to report mid-single digit growth. Within home care, Odonil franchise performed well," said Dabur.
Similarly, in healthcare, key brands such as Dabur Honey, Honitus, Hajmola franchise and health juices are likely to register a double-digit growth led by strong volumes, it said.
However, due to the higher-than-expected rainfall and floods in July and August, Dabur's beverage portfolio was impacted. This includes Real fruit juices and coconut water.
Moreover, it also expects e-commerce (including quick commerce) to grow in double digits and modern trade maintained its growth momentum in the second quarter.
While in international business, key geographies like MENA (Middle East and North Africa), Turkiye, and Bangladesh are expected to perform well.
"However, our Nepal business was adversely impacted due to political unrest," said Dabur, adding, "Consequently, we expect our overall international business to post mid-single digit growth in INR and CC terms." In FY25, international business had contributed to 26.5 per cent of Dabur's consolidated sales.
At the consolidated level, Dabur expect the "revenue to grow in the mid-single digits and operating profit to grow almost in line with revenue." According to the company, this update provides an overall summary of the performance and demand trends witnessed during Q2/FY26. This will be followed by detailed financial results and earnings once its board approves the consolidated and standalone financial results for the quarter ended September 2025.
So far in 2025, Dabur shares fell 4%.
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