HUL says demonetisation, GST win-win for India

Indian consumer goods company, Hindustan Unilever in an investor presentation on Monday said that the demonetisation move by the government and the upcoming Goods and Service Tax (GST) bill will be a ‘win-win’ situation for all.

Welcoming the moves that has led to a ‘cash strapped’ situation in the economy, the company said that both these moves will lower inflation for consumers, will simplify and make compliance more effective, level the playing field for industries, will lead to a higher growth for the economy and lower fiscal deficit and higher the taxation base for the government.

HUL pointed out in the presentation that there will be temporary pain for consumers and traders will have lower cash available and liquidity will be squeezed; however, the company said that it has taken various measures to ‘address these challenges.’

The company said that it has introduced rapid planning and replenishment measures to capture the fast changing consumer demand among others and has started working closely with traders and distributors to mitigate the impact of cash crunch.

The company said that in the short term markets are going to be adversely impacted for a few months but gradual improvements led by urban demand will prevail.

The speed of recovery of the economy will depend on liquidity build up across the chain, the company said.

With regards to its near term performance the company said that it will come under pressure however they said, “We are well positioned as channels and consumers evolve in terms of portfolio, talent and capabilities.”