Impact of GST on Dabur

When GST was introduced, Dabur as an organisation was quick in jumping into the
bandwagon and had taken immediate actions. The Chief Financial Officer of Dabur India, Mr.
Lalit Malik had directed all their businesses to charge in the new and revised low rates, even
on existing stocks. They should give the GST benefits to their end consumers.
Dabur benefited from GST as well, as it saved a significant amount of money on logistics.
Following the implementation of GST, the company's distribution costs, which previously
accounted for 2-7 percent of overall costs, were reduced to 1.5 percent.
Dabur India had revised the MRPs immediately on their fresh production after the
introduction of the rule. The prices were on downward trend mostly. They believe it has
soothed and made their business easier. The reduction in tax rates on their products is
resulting in more consumer goodwill. Skin, home care, shampoo, detergent product
segment saw a cut of 9 % in price.
Dabur set aside Rs14.5 crore as an extraordinary item to cover costs associated with the GST
transition's impact on inventories held by distributors. This amounted to a 9.8% drop in net
profit, which would have dropped by 4.9 percent if not for this.
Dabur India faced some disruptions in sales after GST roll out, prices were slashed which
saw a decline in their revenues in their international market. Destocking in trade channels
led to decline of around 5 % in sales volume. The secondary sales growth was healthy at a
two percent.