Dabur India witnessed a moderation in its second-quarter fiscal 2025–26 sales, primarily due to consumer and retailer deferrals ahead of Goods and Services Tax (GST) rate reductions. The temporary slowdown impacted key product categories, including oral care, juices, and hair oils, as buyers awaited the benefits of lower tax rates. Despite this short-term disruption, Dabur’s core portfolio demonstrated resilience, sustaining market share across most segments. The company remains optimistic about long-term growth, expecting consumer demand to rebound as the market adjusts to the revised GST structure, while policy reforms are anticipated to enhance affordability and stimulate consumption.
Impact of GST Rate Cuts on Sales
The GST Council's September 2025 decision simplified the tax structure to two main rates—5% and 18%—affecting around 85% of Dabur’s portfolio. This led to a temporary shift in consumer behavior, with purchases deferred in anticipation of lower prices. Retailers also delayed restocking existing higher-taxed inventory, contributing to the short-term sales moderation.
Resilience Across Core Product Segments
Despite the GST-driven slowdown, Dabur’s flagship categories maintained steady performance. The oral care segment continued its growth trajectory, with double-digit expansion expected. Retail offtakes remained strong, allowing Dabur to preserve market share in over 90% of its offerings. These results underscore the brand’s robust market positioning and adaptability to regulatory changes.
Strategic Outlook and Recovery Prospects
Dabur anticipates that the GST reforms will improve product affordability, enhancing consumer purchasing power over time. The company plans to pass on these benefits to customers, aiming to revive demand and stimulate long-term growth. While the immediate quarter reflected temporary disruption, the firm remains confident that market adjustments will restore momentum across its product portfolio.
Conclusion
Dabur’s Q2 performance highlights the short-term impact of GST rate adjustments on consumer purchasing patterns. Nevertheless, the company’s resilient core portfolio, coupled with strategic positioning and policy reforms, provides a solid foundation for recovery. As consumers and retailers adapt to the new tax framework, Dabur is well-poised to capitalize on renewed demand, ensuring sustained growth and value creation for stakeholders.
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