Reckitt Benckiser, the British consumer goods major said, due to the implementation of goods and service taxes in India and the cyber attacks across the world, the business of the company has been affected in the quarter ended June. Many customers have delayed their orders due to the new-tax operation, which has seen the sales down in the hygienic products. The makers of Dettol soap and Harpic disinfectant cleaner said, the outcome profit on these brands are small as expected, said by analysts.
As India is the largest market of Dettol in the middle east, it has suffered loss and the additional challenge was cyber attacks which complicate the matter more. Analysts said that Reckitt has also missed the earlier profit in 2017, and now the company is indicating the tougher pricing in the developed market. For the September quarter, Reckitt saw its developing market region, led by countries like India, China, Korea and Turkey, show a reported topline growth of only one percent. Different firms have also curbed sales from factories which have impacted the numbers into the second and third quarter.
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Additionally, with the hygiene products, the body-care products also experienced hardship in their net revenue, Kolkata-based Emami Ltd posted 98 percent decline in net profit at Rs 1.04 crores. Similarly, Godrej Consumer Products Ltd. also reported the decline of 11.92 percent in consolidated net profit to Rs 235.94 crores for the June quarter.
The goods and service tax announced by India on July 1, has impacted the growth of the business and products as indicated by GlaxoSmithKline Consumer. GST has a range of indirect taxes levied by the central and state government into the five tax slabs ranging from nil, 5%, 12%, 18% and 28%. While GST rates reduced the prices of low-margin, and high-volume goods, it has also affected the sales of more premium products that are placed in 28% slab.
Various FMCG Companies Still Raised Profit
Fast moving consumer goods (FMCG) major Colgate-Palmolive India has reported a rise of 33.50% in its net profit at 170.65 crores that ended in December 2017 led by the huge volume growth. Its total income was up 4.01% to Rs1,042.36 crores during the quarter against the Rs1,002.12 crores in the corresponding quarter in the last fiscal. Margins for the home-care business in the fiscal fourth-quarter grew to 12.9% from 8.7% year-on-year.”Excluding the accounting impact of GST implementation, net sales increased by 19 percent over the previous year. Volume increased by 12 percent.” said by Colgate-Palmolive in the statement in India.
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