Fast-moving consumer goods (FMCG) companies are likely to feel the heat of trade disruption caused by the GST reforms in the September quarter, as the retail universe adjusts to the new tax regime, which kicked in from September 22.

Conversations with industry executives indicate that topline growth will likely come in at 2-3%, as volume growth is expected to be weak in Q2 due to destocking by trade.

HUL flags trade destocking and weak volume growth

The first indication was given by sector bellwether Hindustan Unilever (HUL) last week, which said it saw near-flat to low-single-digit growth in Q2 due to postponement of new orders by trade to clear existing stock and delayed pantry buying by consumers, notably, in September. The trend is expected to continue into October as kiranas

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