Dabur India , a leading FMCG company, has received an updated income tax order that significantly reduces the tax demand imposed on the company. This development comes as part of an ongoing process to rectify previous tax calculations.

Revised Tax Demand

The company has disclosed that an Order under Section 154 of the Income Tax Act has been issued, revising the earlier tax demand. The key points of this revision are:

Company's Response

Despite the reduction, Dabur India maintains that the revised calculation is still erroneous and misleading. The company has stated that it does not expect any financial implications from this order. In response to this situation, Dabur India plans to take the following steps:

1. File an application under Section 154 of the Income Tax Act to rectify the demand.
2. Address what they consider to be a mistake apparent from records.

Timeline and Disclosure

• The company received the revised order at 4:00 PM.
• Dabur India promptly disclosed this information to the stock exchanges in compliance with SEBI regulations.

Market Implications

While the reduction in tax demand is substantial, amounting to approximately ₹77.12 crore, the company's assertion that even the revised amount is incorrect suggests that further adjustments may be forthcoming. Investors and market watchers will likely keep a close eye on how this tax issue unfolds and its potential impact on Dabur India's financials.

The company's proactive approach in addressing this tax matter and its transparent communication with stakeholders demonstrate its commitment to corporate governance and regulatory compliance.

As this situation continues to evolve, stakeholders are advised to monitor further updates from the company regarding the final resolution of this tax demand.

Dabur India , a leading FMCG company, has released its quarterly update for Q2, revealing insights into its performance and market trends. The company expects a temporary sales slowdown attributed to recent GST rate reductions but remains optimistic about future growth prospects.

Key Highlights

• Dabur projects mid-single digit growth in consolidated revenue for Q2
• Operating profit expected to grow almost in line with revenue
• Anticipates accelerated revenue growth in upcoming quarters
• Solid growth projected in oral care, healthcare, and culinary segments
• International business facing challenges, particularly in Nepal

Impact of GST Rate Cuts

The recent GST reforms have significantly impacted Dabur's business landscape:

*Includes Oral care, Juices, Hair oils, Shampoo, Digestives, OTC, Branded Ethicals, and Culinary

Dabur has committed to passing on the benefits of reduced GST rates to consumers, which is expected to boost consumption across categories and strengthen demand in both urban and rural markets.

Performance Across Segments

Despite the temporary disruption caused by GST rate cuts, Dabur has observed resilience in various product categories:

• Oral Care: Expected to deliver double-digit growth in both Red Toothpaste and Meswak
• Skin Care: Projected high-single digit growth led by Gulabari and Oxy franchise
• Hair Care: Shampoos anticipated to register high-single digit growth, while Hair Oils may see mid-single digit growth
• Healthcare: Key brands like Dabur Honey, Honitus, Hajmola franchise, and Health Juices likely to register double-digit growth
• F&B: Culinary business expected to record double-digit growth, with strong performance in Oils & Fats
• Beverages: Premium 'Activ' range projected to report robust growth of 30%+, despite overall portfolio impact due to higher-than-expected rainfall and floods in July and August

Channel Performance and International Business

• E-commerce (including Quick commerce) expected to grow in double digits
• Modern Trade maintained its growth momentum
• International business projected to post mid-single digit growth in INR and CC terms
• Key international markets like MENA, Turkey, Namaste, and Bangladesh performing well, while Nepal faces challenges due to political unrest

Looking Ahead

Dabur anticipates that supportive macroeconomic conditions and the recently announced GST rate cuts will strengthen consumption, leading to regained momentum in revenue growth in the coming quarters. The company's focus on passing on GST benefits to consumers and its strong market presence position it well for future growth.

As Dabur navigates through these changes, investors and market watchers will be keen to see how the company's strategies unfold in the evolving FMCG landscape.