Motilal Oswal Financial Services

Sector Update | 8 September 2025

Consumer

Company

Staples

BRIT

CLGT

DABUR

HMN

GCPL

HUVR

ITC

JYL

MRCO

NESTLE

PG

Target

Price

(INR)

Reco

GST 2.0 – Odds are favoring consumption boost

In continuation of PM Modi’s announcement on GST rate rationalization on

Independence Day, the 56th GST meet concluded with most consumer

categories receiving a GST rate cut. Several large categories previously taxed at

18% have been unexpectedly reduced to 5%, reflecting the government’s no-

half-measures approach. The revised rates will take effect from 22

nd

Sep’25

onwards (except for cigarettes). This decision comes just ahead of the festive

season and is likely to boost consumption across both rural and urban markets.



In our report (dated 18

th

August),

Consumption revival mode continues,

we

highlighted that the rationalization of GST rates and the simplification of the

rate structure will further accelerate the consumption revival. Consumption

trends over the past 2-3 years remained subdued due to commodity inflation,

rising interest rates, and post-COVID pressures on both large and small

businesses. While the government initially focused on infrastructure and

manufacturing set-up, consumption revival has now become among the top

priorities. Proactive steps, such as lowering interest rates, providing income tax

relief, and implementing GST rate cuts, have been taken to revive consumption.

With improving macros, easing inflation, and a favorable monsoon outlook, the

consumption sector is well poised for recovery over the next 12-15 months.



We expect most companies to pass on the benefits of the GST rate reduction to

consumers (anti-profiteering clause), either through increased grammage in

price-point packs or price reductions. While there may be some near-term trade-

related challenges, we view these steps as structural changes that will boost

consumption. We had already anticipated volume acceleration, and with the

GST cuts, we expect an additional 200-300bp of volume growth across

companies. Categories/companies with a higher LUP mix may particularly

benefit, as the major advantages are likely to be passed on through higher

grammage.



We analyzed GST 1.0 and its impact on various companies’ operational delivery

and stock performances (

link

). We noted that following the GST implementation

(July 2017), there was a significant pickup in volume and revenue growth in the

subsequent quarters. FY18 and FY19 witnessed growth acceleration of

500-1,000bp compared to FY17 across companies. Since GST was implemented

in July, there was minimal trade disruption in 2QFY18 performance. However,

with GST 2.0 scheduled at the end of 2QFY26, some challenges may arise in that

quarter’s performance. Nonetheless, we remain constructive on the

consumption revival and continue to favor staple companies.

We upgrade our

rating for CLGT from Neutral to BUY. The stock has corrected ~35% over the

past 12 months and is trading at a comfortable valuation of 46x and 41x P/E for

FY26 and FY27, respectively. Our top picks in the staples universe are HUL,

GCPL, and Marico.



6,500

Neutral

2,850 Upgrade to Buy

625

Buy

750

Buy

1,450

Buy

3,050

Buy

500

Buy

375

Neutral

850

Buy

1,300

Neutral

15,000

Neutral

Naveen Trivedi – Research Analyst

(Naveen.Trivedi@motilaloswal.com

Research Analyst:

Amey Tiwari

(Amey.Tiwari@MotilalOswal.com) |

Tanu Jindal

(Tanu.Jindal@MotilalOswal.com)

Investors are advised to refer through important disclosures made at the last page of the Research Report.

Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.

Consumer: GST 2.0 – Odds are favoring consumption boost

Major catalyst for most essential categories – Much needed booster

The GST Council has approved a rate rationalization, shifting from the current four-

tier structure (5%, 12%, 18%, 28% + cess) to a streamlined two-rate system—an 18%

standard rate and a 5% merit rate. Additionally, a special 40% de-merit rate has

been introduced for select categories, such as cigarettes and carbonated beverages.

Key staples subcategories, such as essential Personal Care (Hair oil, Shampoo, Soaps,

Oral Care) and Foods (Biscuits, Noodles, Namkeen, Dairy products, Instant coffee,

Chocolates, and Fruit juices), have seen their GST rates reduce from 12%/18% to 5%.

We believe Britannia, Nestlé, Emami, and Colgate will be the key beneficiaries

(Exhibit

1).

Based on our revenue mix assumption and GST rate change, we have

calculated the GST rate reduction at the company level. Accordingly, we have also

revised our revenue and earnings estimates for FY26 and FY27 to factor in the

potential volume uptick and earnings revision. (Exhibit

4).

Cigarette new structure positive; need further clarity on additional cess

Currently, the total taxes on cigarettes stand at ~50-55% of the MRP (28% GST+

Cess+ NCCD), depending on the length of the cigarette, with ~6% attributed to

NCCD. Under the proposed new structure, the GST rate will be reduced to 40% of

MRP vs. the previous structure on transaction value. Prima facie, the structure

appears to be positive for the cigarette industry. If the NCCD is also removed, the

effective tax difference could be as high as 10-15%, whereas if it remains, the

benefit narrows to about 5-9%. Given the earlier expectation of a tax-neutral

outcome, there is a possibility of additional cess/etc on cigarettes. The GST rate

change for cigarettes will not be implemented immediately (22

nd

September),

leaving room for further updates. The government is awaiting full repayment of

loans and interest obligations under the compensation cess account before

implementing the new GST rate on cigarettes. The outer timeline for

implementation is 31

st

Mar’26. For now, we are considering neutral taxes on

cigarettes and are not factoring any impact into our earnings model.

Near-term distribution and channel disruptions ahead of GST transition

In the near term, the distribution ecosystem is likely to face temporary pressures as

trade adjusts to the new GST rates. Distributors and retailers may reduce stocking

levels ahead of the implementation date to avoid holding higher-taxed inventory,

leading to short-term destocking in the channel. Companies will recalibrate

packaging, grammage, and price points to fully reflect the revised tax structure,

which may add to short-lived supply chain disruptions. While these adjustments

could weigh on reported volumes in the near term, we believe the impact is

transitory and should normalize as fresh inventory flows into the system.

GST rate cut: Colgate, Britannia, Emami, and Nestlé among top gainers



As highlighted in

Exhibit 1,

the key beneficiaries of the recent GST rate cuts are

companies with a large share of their domestic sales exposed to categories

witnessing meaningful tax reductions. Colgate stands out, with ~95% of its

domestic portfolio covered, translating into ~12% effective GST rate reduction

at the company level. Britannia is another major beneficiary, with ~90% of its

domestic sales mix falling under the impacted categories, also resulting in ~12%

effective GST cut at the company level. Emami, with ~90% domestic sales

2

8 September 2025

Consumer: GST 2.0 – Odds are favoring consumption boost



contribution, is expected to see ~9% effective reduction at the company level,

while Nestlé India, with ~80% of sales from the domestic market, benefits from

~8% cut at the company level. Other notable beneficiaries include Dabur, GCPL,

HUL, Marico, and Jyothy Labs, which also stand to gain from GST rationalization,

though with relatively lower exposure at the company level compared to the

top four players.

Most FMCG stocks have already rallied in the past two weeks, partly factoring in

the anticipated benefits from GST rate rationalization (Exhibit

5).

While the

immediate stock reaction was muted due to this run-up, we believe the

structural benefits of lower taxation—particularly in essential food and personal

care categories—will support healthy volume-led growth over the medium

term.

% of India

revenue mix

benefits

95%

90%

80%

62%

35%

25%

14%

% reduction in GST

rate at company

level

12%

9%

8%

7%

5%

4%

3%

2%

Exhibit 1: Company-wise India revenue exposure and effective GST rate cut

Company

Colgate

Britannia

Emami

Nestle

Dabur

GCPL

HUL

Marico

Jyothy

Key categories that will benefit from GST rate cut



Toothpaste, toothbrush

Biscuits, cake, bread, cheese, dairy products (cheese, flavoured milk)

Hair oil, ayurvedic supplements (balm, Chyawanprash), Boro plus, shampoo

Instant noodles, pasta, dairy products, chocolates, coffee, sauces/ketchup

Toothpaste, toothbrush, ayurvedic supplements, honey, hair oil

Soaps

Soaps, talcum powder, shampoo, hair oil, ice cream, toothpaste, sauces/ketchup, jams

Hair oil, shampoo, packaged foods portfolio

Soaps

Source: Company, MOFSL

Exhibit 2: Category-wise GST rate revision and India revenue mix

GST rate (%)

Categories

Soaps

Hair Oil

Shampoo

Toothpaste

Toothbrush

Chocolates

Biscuits

Cakes, Bakery

Coffee

Talc Powder

Butter

Cheese

Noodles

Fruit Juices

UHT Milk

Condensed milk

Nutrition

Balm

Antiseptic cream

Others - 18%

Others - 12%

Total

HUL

2%

0%

1%

0%

1%

0%

4%

Dabur

0%

2%

1%

2%

0%

1%

0%

1%

0%

7%

% reduction in GST rate at company level (our estimates)

Marico

Britannia

GCPL

Colgate

Emami

0%

5%

0%

3%

0%

4%

0%

10%

0%

2%

0%

9%

0%

3%

0%

1%

0%

2%

0%

1%

0%

3%

12%

5%

12%

9%

Source: Company, MOFSL

Nestle

0%

2%

0%

1%

0%

2%

0%

1%

0%

2%

0%

8%

Jyothy

1%

0%

1%

0%

2%

Exhibit 4: Changes to our estimates following the GST change

Companies

Volume Growth (%)

HUL

NESTLE

DABUR

BRITANNIA

GCPL

MARICO

COLGATE

EMAMI

Revenue (INR bn)

HUL

NESTLE

DABUR

BRITANNIA

GCPL

MARICO

COLGATE

EMAMI

Revenue growth (%)

HUL

NESTLE

DABUR

BRITANNIA

GCPL

MARICO

COLGATE

EMAMI

EBITDA (INR bn)

HUL

Revised Estimates

FY26E

5.5

7.5

7.0

6.5

7.0

10.5

2.5

4.5

FY26E

675.8

220.2

135.7

200.5

163.3

131.8

62.5

40.3

FY26E

7

9

8

12

14

22

3

6

FY26E

154.9

FY27E

7.0

9.5

7.0

10.0

9.0

11.5

7.0

8.0

FY27E

734.3

244.5

148.7

226.8

181.2

144.5

68.0

44.1

FY27E

9

11

10

13

11

10

9

FY27E

173.6

Earlier Estimates

FY26E

5.0

6.5

4.0

7.0

9.5

1.0

4.0

FY26E

670.1

218.0

134.3

197.7

162.9

131.0

61.4

40.1

FY26E

6

8

7

10

13

21

2

5

FY26E

153.7

FY27E

5.0

7.0

6.0

7.0

7.5

10.0

4.0

6.0

FY27E

720.0

237.6

145.4

216.2

179.7

142.7

65.9

43.3

FY27E

7

9

8

9

10

9

7

8

FY27E

170.4

Variance (bps/%)

FY26E

50bp

100bp

50bp

250bp

0bp

100bp

150bp

50bp

FY26E

1%

0%

1%

2%

1%

FY27E

200bp

250bp

100bp

300bp

150bp

300bp

200bp

FY27E

2%

3%

2%

5%

1%

3%

2%

FY26E

1%

FY27E

2%

8 September 2025

4

Consumer: GST 2.0 – Odds are favoring consumption boost

Companies

Volume Growth (%)

NESTLE

DABUR

BRITANNIA

GCPL

MARICO

COLGATE

EMAMI

EBITDA growth (%)

HUL

NESTLE

DABUR

BRITANNIA

GCPL

MARICO

COLGATE

EMAMI

PAT (INR bn)

HUL

NESTLE

DABUR

BRITANNIA

GCPL

MARICO

COLGATE

EMAMI

PAT growth (%)

HUL

NESTLE

DABUR

BRITANNIA

GCPL

MARICO

COLGATE

EMAMI

Revised Estimates

FY26E

52.2

25.4

36.1

32.4

24.1

20.1

11.1

FY26E

4

8

10

13

8

13

3

8

FY26E

108.7

33.1

19.6

25.4

22.5

18.2

14.4

9.4

FY26E

4

7

9

15

19

14

3

6

FY27E

60.2

28.5

41.3

38.5

28.1

22.2

12.3

FY27E

12

15

13

14

19

17

11

FY27E

123.4

38.7

22.2

29.5

27.7

20.8

15.9

10.3

FY27E

14

17

13

16

23

14

11

9

Earlier Estimates

FY26E

51.4

25.1

35.6

32.3

23.8

19.8

10.9

FY26E

3

6

8

12

7

11

1

6

FY26E

107.8

32.5

19.4

25.0

22.4

17.9

14.1

9.3

FY26E

3

6

8

13

18

12

1

5

FY27E

58.1

27.9

39.3

38.1

27.3

21.5

11.9

FY27E

11

13

11

18

15

9

FY27E

121.0

37.4

21.7

28.0

27.4

20.2

15.4

9.9

FY27E

12

15

12

22

13

9

7

Variance (bps/%)

FY26E

2%

1%

0%

1%

2%

FY27E

4%

2%

5%

1%

3%

4%

FY26E

1%

2%

1%

2%

0%

2%

FY27E

2%

3%

2%

5%

1%

3%

4%

8 September 2025

5

Consumer: GST 2.0 – Odds are favoring consumption boost

Exhibit 5: Stock price performance across our coverage companies

Nifty FMCG has

outperformed the Nifty 50

following the GST

rationalization

announcement by PM Modi

on Independence Day.

Company name

Nifty 50

Nifty FMCG

Staples

Britannia

Colgate

Dabur India

Emami

Godrej Consumer

Hindustan Unilever

ITC

Jyothy Labs

Marico

Nestle India

P & G Hygiene

Paints

Asian Paints

Indigo Paints

Pidilite

Liquor

United Breweries

United Spirits

Radico Khaitan

Innerwear

Page Industries

QSR

Barbeque-Nation

Devyani Intl.

Jubilant Food.

Restaurant Brand

Sapphire Foods

Westlife Food

Jewelry

Kalyan Jewellers

P N Gadgil

Senco Gold

Titan Company

20 Days

(Modi announcement)

0

3

15

12

9

4

6

-1

0

3

11

2

4

0

-5

-0

-2

2

16

4

1

5

11

-6

6

7

5

3M

1

2

9

-2

13

5

-1

12

-2

-3

4

1

-0

14

8

-0

-10

-17

4

-4

-18

8

0

-1

3

11

-10

7

2

4

Price Perf (%)

6M

10

11

32

-1

11

16

23

21

3

5

23

11

0

19

17

15

-4

1

35

9

-9

8

4

25

-2

8

14

11

35

19

1 Year

-1

-12

3

-33

-14

-26

-16

-6

-15

-40

14

-4

-18

-21

-3

-9

-11

40

5

-58

0

-26

-3

-10

-23

NA

-35

1

Among staple companies,

Britannia, Colgate, and

Nestle posted >10% returns

in the last 20 days.

Source: Bloomberg

We analyzed the impact of GST 1.0 on various companies’ operational delivery and

stock performances (link). We noted that post the GST implementation (July 2017),

there was a significant pickup in volume and revenue growth in the subsequent

quarters. FY18 and FY19 witnessed growth acceleration by 500-1,000bp compared

to FY17 across companies. Since the GST was implemented in July, there was

minimal trade disruption in 2QFY18 performance. However, with GST 2.0 scheduled

at the end of 2QFY26, some challenges may arise in that quarter’s performance. In

the following company charts, the left axis represents EBITDA growth, while the

right axis represents volume growth.

GST 1.0 – Companies’ operating performance in FY18 and FY19

8 September 2025

6

Consumer: GST 2.0 – Odds are favoring consumption boost

Exhibit 6: HUL volume and EBITDA growth

27%

18%

9%

0%

-9%

EBITDA growth (%)

Volume growth (%)

15%

10%

5%

0%

-5%

2,500

2,000

1,500

1,000

500

Exhibit 7: HUL price performance

HUVR IN

Source: Company, MOFSL

Exhibit 8: Britannia volume and EBITDA growth

46%

23%

0%

-23%

-46%

EBITDA growth (%)

Volume growth (%)

16%

12%

8%

4%

0%

Exhibit 9: Britannia price performance

BRIT IN

3,400

2,800

2,200

1,600

1,000

Source: Company, MOFSL

Exhibit 10: Colgate volume and EBITDA growth

EBITDA growth (%)

45%

30%

15%

0%

-15%

Volume growth (%)

14%

7%

0%

-7%

-14%

Exhibit 11: Colgate price performance

CLGT IN

1,600

1,400

1,200

1,000

800

Source: Company, MOFSL

Exhibit 12: Dabur volume and EBITDA growth

90%

60%

30%

0%

-30%

EBITDA growth (%)

Volume growth (%)

24%

16%

8%

0%

-8%

Exhibit 13: Dabur price performance

DABUR IN

530

460

390

320

250

Source: Company, MOFSL

8 September 2025

7

Consumer: GST 2.0 – Odds are favoring consumption boost

Exhibit 14: Emami volume and EBITDA growth

60%

30%

0%

-30%

-60%

EBITDA growth (%)

Volume growth (%)

20%

10%

0%

-10%

-20%

680

560

440

320

200

Exhibit 15: Emami price performance

HMN IN

Source: Company, MOFSL

Exhibit 16: GCPL volume and EBITDA growth

60%

40%

20%

0%

-20%

EBITDA growth (%)

Volume growth (%)

24%

16%

8%

0%

-8%

Exhibit 17: GCPL price performance

GCPL IN

1,000

850

700

550

400

Source: Company, MOFSL

Exhibit 18: Marico volume and EBITDA growth

24%

12%

0%

-12%

-24%

EBITDA growth (%)

Volume growth (%)

36%

24%

12%

0%

-12%

Exhibit 19: Marico price performance

MRCO IN

400

350

300

250

200

Source: Company, MOFSL

Exhibit 20: Nestle volume and EBITDA growth

90%

60%

30%

0%

-30%

EBITDA growth (%)

Volume growth (%)

60%

30%

0%

-30%

-60%

Exhibit 21: Nestle price performance

NEST IN

800

650

500

350

200

*FY17 growth led by a weak base (Maggi Controversy)

Source: Company, MOFSL

8 September 2025

8

Consumer: GST 2.0 – Odds are favoring consumption boost

Exhibit 22: Companies’ operating performance in FY16, FY17, FY18, and FY19

Volume growth (%)

1Q

HUL

4%

NESTLE

15%

DABUR

4%

BRITANNIA

8%

GCPL (Stand)

3%

MARICO

-1%

COLGATE

6%

EMAMI

17%

Revenue growth (%)

1Q

HUL

4%

NESTLE

16%

DABUR

-6%

BRITANNIA

8%

GCPL (Stand)

0%

MARICO

0%

COLGATE

9%

EMAMI

20%

EBITDA growth (%)

1Q

HUL

8%

NESTLE

29%

DABUR

9%

BRITANNIA

43%

GCPL (Stand)

15%

MARICO

18%

COLGATE

4%

EMAMI

50%

APAT growth (%)

1Q

HUL

6%

NESTLE

-25%

DABUR

18%

BRITANNIA

62%

GCPL (Stand)

13%

MARICO

18%

COLGATE

-10%

EMAMI

18%

Stock Performance (%) 1Q

HUL

16%

NESTLE

8%

DABUR

3%

BRITANNIA

13%

GCPL (Stand)

12%

MARICO

15%

COLGATE

13%

EMAMI

2%

FY17

2Q

3Q

-1%

-4%

34% 14%

5%

7%

8%

2%

9%

-3%

-9%

4% -12%

11%

0%

2Q

3Q

1%

-1%

38% 16%

-6%

11%

6%

8%

0%

-1%

-8%

9%

-9%

8%

-2%

2Q

3Q

5%

-5%

61% 32%

1% -12%

4%

0%

12% 15%

11% -6%

8% -10%

15%

4%

2Q

3Q

9% -10%

66% 32%

5%

-7%

6%

5%

15% 19%

16% -7%

16% -23%

13%

6%

2Q

3Q

17%

8%

4%

10%

8%

10%

15% 15%

5%

2%

4%

-3%

6%

-3%

2%

12%

4Q

4%

9%

8%

2%

5%

6%

-3%

-2%

4Q

7%

9%

-11%

6%

2%

-6%

4Q

12%

-4%

1%

6%

19%

21%

1%

-5%

4Q

8%

1%

0%

6%

19%

24%

0%

-7%

4Q

5%

1%

2%

8%

0%

3%

-8%

1Q

0%

8%

-4%

3%

0%

-4%

-5%

-18%

1Q

5%

8%

-8%

6%

4%

-4%

-18%

1Q

14%

-6%

-35%

-20%

-3%

-13%

5%

-46%

1Q

15%

-12%

-34%

-31%

-2%

-13%

8%

-52%

1Q

14%

22%

8%

17%

7%

4%

7%

-6%

FY18

2Q

3Q

4%

11%

6%

12%

7%

6%

12%

10% 18%

12% 19%

-1% 12%

10%

6%

2Q

3Q

10% 17%

7%

16%

-1%

6%

4%

9%

11% 17%

6%

15%

3%

19%

14% 10%

2Q

3Q

20% 24%

26% 31%

-2%

6%

11% 27%

22% 28%

2%

10%

9%

32%

15%

2%

2Q

3Q

14% 30%

22% 47%

-4%

12% 20%

21% 29%

2%

17%

-2% 34%

17%

2%

2Q

3Q

11%

0%

12% -2%

16% -5%

13% -7%

16% -15%

9%

-3%

-2%

3%

2% -22%

4Q

11%

8%

11%

6%

12%

4%

9%

4Q

16%

11%

6%

9%

7%

13%

5%

12%

4Q

24%

35%

16%

29%

16%

-3%

26%

-3%

4Q

26%

39%

19%

25%

18%

7%

38%

-5%

4Q

4%

6%

5%

-3%

4%

9%

-6%

1Q

12%

11%

21%

13%

14%

23%

4%

16%

1Q

16%

12%

16%

10%

14%

21%

7%

19%

1Q

21%

45%

71%

19%

43%

9%

27%

54%

1Q

21%

58%

71%

19%

47%

10%

18%

42%

1Q

0%

1%

-9%

-7%

-8%

2%

-8%

-10%

FY19

2Q

3Q

10% 10%

15% 12%

8%

12%

7%

5%

1%

20% 13%

7%

-4%

4%

2Q

3Q

11% 12%

17% 12%

8%

12%

13% 11%

11%

6%

20% 15%

8%

6%

0%

7%

2Q

3Q

20% 22%

25% -5%

14% 26%

20% 13%

14% 12%

13% 16%

10% 11%

-7%

0%

2Q

3Q

23% 17%

32% -4%

11% 30%

16% 14%

15% 11%

18% 12%

11% 13%

-12% -3%

2Q

3Q

4%

12%

11% 17%

10%

6%

-6% 16%

-5% 11%

5%

-5%

5%

22%

-15% 3%

4Q

7%

9%

4%

7%

1%

7%

5%

0%

4Q

9%

10%

5%

10%

-1%

9%

6%

4%

4Q

13%

8%

-6%

10%

3%

17%

1%

-10%

4Q

13%

14%

-6%

12%

207%

17%

2%

-10%

4Q

3%

8%

4%

-4%

-10%

-16%

-11%

-15%

FY16

6%

-38%

5%

11%

10%

7%

4%

14%

FY16

4%

-18%

6%

10%

7%

5%

-3%

8%

FY16

10%

-21%

15%

-19%

17%

21%

14%

27%

FY16

7%

-7%

16%

20%

11%

25%

8%

6%

FY16

-4%

-12%

6%

55%

46%

51%

-6%

11%

FY17

1%

28%

5%

4%

-2%

7%

FY17

3%

15%

-7%

8%

2%

-2%

3%

4%

FY17

5%

22%

-1%

13%

15%

10%

1%

11%

FY17

3%

2%

3%

19%

17%

12%

-5%

6%

FY17

55%

24%

52%

31%

15%

18%

8%

FY18

6%

11%

4%

8%

9%

10%

3%

FY18

12%

1%

7%

11%

7%

6%

4%

FY18

20%

11%

-3%

10%

17%

-2%

18%

-5%

FY18

21%

11%

-5%

2%

18%

1%

18%

-7%

FY18

31%

43%

27%

30%

3%

14%

18%

-29%

FY19

10%

11%

10%

5%

16%

6%

4%

FY19

11%

13%

10%

11%

8%

16%

7%

6%

FY19

19%

23%

19%

15%

14%

11%

1%

FY19

18%

28%

19%

15%

76%

14%

10%

-3%

FY19

20%

42%

11%

-4%

-12%

-15%

5%

-34%

Source: Company, MOFSL

8 September 2025

9

Consumer: GST 2.0 – Odds are favoring consumption boost

Exhibit 23: Valuation summary

Company

Staples

BRIT

CLGT

DABUR

HMN

GCPL

HUVR

ITC

JYL

MRCO

NESTLE

PG

CMP

(INR)

TP

INR

Reco

EPS (INR)

P/E (x)

EV/EBITDA (x)

RoE (%)

Div. (%)

FY25 FY26E FY27E FY25 FY26E FY27E FY25 FY26E FY27E FY25 FY26E FY27E FY25

91.9 105.6 122.4

51.4 52.8 58.6

10.2 11.1 12.5

20.3 21.6 23.6

18.5 22.0 27.0

44.3 46.2 52.5

16.0 17.1 18.6

10.2 10.7 11.9

12.4 14.1 16.1

16.0 17.2 20.0

195.9 269.5 297.0

66

47

54

30

67

59

25

33

59

76

69

58

46

49

28

56

57

24

31

52

70

50

41

44

26

46

50

22

28

45

60

45

33

39

30

43

41

18

23

43

48

50

40

32

35

28

40

17

22

38

45

36

35

29

31

25

33

35

16

19

33

39

33

53.4

79.0

17.4

34.4

15.4

20.7

27.7

19.4

40.9

83.9

84.2

54.2

87.8

17.5

32.8

18.3

21.8

29.9

18.8

44.6

79.3

106.2

53.1

98.9

18.8

31.7

21.5

24.1

31.3

19.8

47.8

85.2

95.7

1.2

2.1

1.5

1.7

1.6

2.0

3.5

1.1

1.6

1.1

1.2

6,079 6,500

Neutral

2,418 2,850 Upgrade to Buy

547

625

Buy

605

750

Buy

1,232 1,450

Buy

2,633 3,050

Buy

408

500

Buy

332

375

Neutral

732

850

Buy

1,210 1,300

Neutral

13,479 15,000

Neutral

Source: Company, MOFSL

Exhibit 24: Current valuation vs. historical averages in the consumption space

Companies

Consumer

Consumer Ex ITC

Asian Paints

Britannia Inds.

Colgate-Palm.

Dabur India

Emami

Godrej Consumer

Hind. Unilever

Indigo Paints

ITC

Jyothy Lab.

L T Foods

Marico

Nestle India

P & G Hygiene

Page Industries

Pidilite Inds.

Tata Consumer

Radico Khaitan

United Breweries

United Spirits

Varun Beverages

Current

P/E (x)

42.8

50.1

51.4

53.4

43.4

45.3

26.2

51.8

55.2

31.1

23.1

30.3

16.4

49.6

64.5

46.6

56.6

59.3

63.7

59.0

66.6

58.1

15 YR

38.4

49.4

39.9

34.4

41.0

23.1

41.6

46.7

65.2

23.5

35.2

8.0

35.0

54.2

56.8

55.1

49.5

32.4

44.1

90.6

-

Average P/E (x)

10 YR

42.2

52.3

57.4

48.6

41.7

47.7

28.7

47.9

53.6

60.6

22.6

32.8

10.2

44.1

61.0

67.0

65.9

61.1

36.9

50.1

95.4

63.7

5 YR

45.1

57.0

64.9

51.3

43.2

52.9

28.4

52.6

56.9

60.6

21.1

32.0

10.2

47.3

68.1

69.2

68.3

74.6

54.7

64.0

101.8

59.3

Prem / Disc P/E (x) vs.

15 YR

10 YR

5 YR

11.7

1.4

-5.0

30.6

-4.1

-12.0

4.0

-10.5

-20.9

33.9

9.8

4.0

26.0

4.0

0.3

10.5

-5.0

-14.5

13.6

-8.7

-7.6

24.6

8.1

-1.6

18.2

3.0

-3.1

-52.3

-48.7

-1.4

2.3

9.9

-13.8

-7.7

-5.1

106.2

61.5

61.2

41.9

12.6

4.8

18.9

5.6

-5.3

-17.9

-30.4

-32.6

2.7

-14.2

-17.2

19.9

-3.0

-20.5

96.6

72.7

16.5

33.7

17.7

-7.8

33.7

17.7

-7.8

-26.5

-30.2

-34.6

-99.3

-8.8

-2.0

Source: Company, MOFSL

8 September 2025

10

Consumer: GST 2.0 – Odds are favoring consumption boost

Exhibit 25: Consumer sector’s P/E band (x)

P/E (x)

58.0

51.0

44.0

37.0

30.0

38.0

33.5

55.5

46.4

42.2

Avg (x)

Max (x)

Min (x)

+1SD

-1SD

42.8

Source: Bloomberg, MOFSL

Exhibit 26: Consumer sector’s P/E relative to the Nifty P/E (%)

170.0

140.0

110.0

80.0

50.0

104.8

PE Relative to Nifty PE (%)

Avg (x)

108.0

Source: Bloomberg, MOFSL

Exhibit 27: Consumer sector – P/E (Ex-ITC)

78.0

66.0

54.0

42.0

30.0

52.3

45.5

38.3

P/E (x)

Avg (x)

67.0

59.0

Max (x)

Exhibit 28: Consumer P/E relative to Nifty P/E (%) (Ex-ITC)

260.0

210.0

160.0

153.4

PE Relative to Nifty PE (%)

Avg (x)

50.1

110.0

60.0

143.4

Source: Bloomberg, MOFSL

8 September 2025

11

Consumer: GST 2.0 – Odds are favoring consumption boost

Exhibit 29: Consumer sector – EV/EBITDA (x)

42.0

36.0

30.0

24.0

18.0

EV / EBITDA (x)

Max (x)

38.4

Avg (x)

Min (x)

Exhibit 30: Consumer sector – P/B (x)

14.0

12.5

P/B (x)

Min (x)

Avg (x)

+1SD

13.2

11.2

10.2

9.2

8.2

Max (x)

-1SD

10.6

32.0

28.4

24.9

21.1

29.7

11.0

9.5

8.0

Source: Bloomberg, MOFSL

Investment in securities market are subject to market risks. Read all the related documents carefully before investing.

8 September 2025

12

Consumer: GST 2.0 – Odds are favoring consumption boost

Explanation of Investment Rating

Investment Rating

BUY

SELL

NEUTRAL

UNDER REVIEW

NOT RATED

Expected return (over 12-month)

>=15%

< - 10%

< - 10 % to 15%

Rating may undergo a change

We have forward looking estimates for the stock but we refrain from assigning recommendation

-

*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall be within following 30 days take

appropriate measures to make the recommendation consistent with the investment rating legend.

Disclosures

The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).

Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412 and BSE enlistment no. 5028. MOFSL, the Research Entity (RE) as defined in

the Regulations, is engaged in the business of providing Stock broking services, Depository participant services & distribution of various financial products. MOFSL is a listed public company, the details in

respect of which are available on www.motilaloswal.com. MOFSL is registered with the Securities & Exchange Board of India (SEBI) and is a registered Trading Member with National Stock Exchange of

India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and National Commodity & Derivatives Exchange Limited (NCDEX) for its stock broking

activities & is Depository participant with Central Depository Services Limited (CDSL) National Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member of Association of Mutual

Funds of India (AMFI) for distribution of financial products and Insurance Regulatory & Development Authority of India (IRDA) as Corporate Agent for insurance products and is a member of Association of

Portfolio Managers in India (APMI) for distribution of PMS products. Details of associate entities of Motilal Oswal Financial Services Ltd. are available on the website at

http://onlinereports.motilaloswal.com/Dormant/documents/Associate%20Details.pdf

MOFSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and buy or sell the securities or

derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial

instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have any other potential conflict of interests with respect to any recommendation and

other related information and opinions.; however the same shall have no bearing whatsoever on the specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are

completely independent of the views of the associates of MOFSL even though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.

MOFSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report should be aware that MOFSL

may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific merchant banking, investment banking or brokerage

service transactions. Details of pending Enquiry Proceedings of Motilal Oswal Financial Services Limited are available on the website at

https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx

A graph of daily closing prices of securities is available at

www.nseindia.com, www.bseindia.com.

Research Analyst views on Subject Company may vary based on Fundamental research and Technical

Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated from MOFSL research activity and therefore it can have

an independent view with regards to Subject Company for which Research Team have expressed their views.

Regional Disclosures (outside India)

This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use would be contrary to

law, regulation or which would subject MOFSL & its group companies to registration or licensing requirements within such jurisdictions.

For Hong Kong:

This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong Kong Securities and Futures

Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst Regulations) 2014 Motilal Oswal Securities (SEBI Reg.

No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of research report in Hong Kong. This report is intended for distribution only to “Professional

Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity to which this document relates is only available to professional investor and will be engaged only with professional

investors.” Nothing here is an offer or solicitation of these securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who

compile this report is/are not located in Hong Kong & are not conducting Research Analysis in Hong Kong.

For U.S.

Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state laws in the United

States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934 Act, the "Acts), and under

applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment services provided by MOFSL, including the products and services

described herein are not available to or intended for U.S. persons. This report is intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and

interpretations thereof by SEC (henceforth referred to as "major institutional investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment

or investment activity to which this document relates is only available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration

provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct

business with Institutional Investors based in the U.S., MOFSL has entered into a chaperoning agreement with a U.S. registered broker-dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL").

Any business interaction pursuant to this report will have to be executed within the provisions of this chaperoning agreement.

The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered broker-dealer,

MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading securities held by a research

analyst account.

For Singapore

In Singapore, this report is being distributed by Motilal Oswal Capital Markets (Singapore) Pte. Ltd. (“MOCMSPL”) (UEN 201129401Z), which is a holder of a capital markets services license and an exempt

financial adviser in Singapore.This report is distributed solely to persons who (a) qualify as “institutional investors” as defined in section 4A(1)(c) of the Securities and Futures Act of Singapore (“SFA”) or (b)

are considered "accredited investors" as defined in section 2(1) of the Financial Advisers Regulations of Singapore read with section 4A(1)(a) of the SFA. Accordingly, if a recipient is neither an “institutional

investor” nor an “accredited investor”, they must immediately discontinue any use of this Report and inform MOCMSPL .

In respect of any matter arising from or in connection with the research you could contact the following representatives of MOCMSPL. In case of grievances for any of the services rendered by MOCMSPL

write to grievances@motilaloswal.com.

Nainesh Rajani

Email: nainesh.rajani@motilaloswal.com

Contact: (+65) 8328 0276

.

Specific Disclosures

1. Research Analyst and/or his/her relatives do not have a financial interest in the subject company(ies), as they do not have equity holdings in the subject company(ies).

MOFSL has financial interest in the subject company(ies) at the end of the week immediately preceding the date of publication of the Research Report: No.

Nature of Financial interest is holding equity shares or derivatives of the subject company

2. Research Analyst and/or his/her relatives do not have actual/beneficial ownership of 1% or more securities in the subject company(ies) at the end of the month immediately

preceding the date of publication of Research Report.

MOFSL has actual/beneficial ownership of 1% or more securities of the subject company(ies) at the end of the month immediately preceding the date of publication of Research

Report:No

3. Research Analyst and/or his/her relatives have not received compensation/other benefits from the subject company(ies) in the past 12 months.

MOFSL may have received compensation from the subject company(ies) in the past 12 months.

4. Research Analyst and/or his/her relatives do not have material conflict of interest in the subject company at the time of publication of research report.

MOFSL does not have material conflict of interest in the subject company at the time of publication of research report.

5. Research Analyst has not served as an officer, director or employee of subject company(ies).

6. MOFSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months.

7. MOFSL has not received compensation for investment banking /merchant banking/brokerage services from the subject company(ies) in the past 12 months.

8. MOFSL may have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company(ies)

in the past 12 months.

9. MOFSL may have received compensation or other benefits from the subject company(ies) or third party in connection with the research report.

10. MOFSL has not engaged in market making activity for the subject company.

********************************************************************************************************************************

The associates of MOFSL may have:

financial interest in the subject company

8 September 2025

13

Consumer: GST 2.0 – Odds are favoring consumption boost

-

actual/beneficial ownership of 1% or more securities in the subject company at the end of the month immediately preceding the date of publication of the Research Report or date of the public appearance.

received compensation/other benefits from the subject company in the past 12 months

any other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the specific recommendations

made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even though there might exist an inherent conflict of interest in

some of the stocks mentioned in the research report.

acted as a manager or co-manager of public offering of securities of the subject company in past 12 months

be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as

an advisor or lender/borrower to such company(ies)

received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.

Served subject company as its clients during twelve months preceding the date of distribution of the research report.

The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report

Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not consider demat accounts

which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from clients which are not considered in above disclosures.

Analyst Certification

The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research analyst(s) was, is, or

will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.

Terms & Conditions:

This report has been prepared by MOFSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and may not be altered in any

way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of MOFSL. The report is based on the facts, figures

and information that are considered true, correct, reliable and accurate. The intent of this report is not recommendatory in nature. The information is obtained from publicly available media or other sources

believed to be reliable. Such information has not been independently verified and no guaranty, representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such

information and opinions are subject to change without notice. The report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe

for securities or other financial instruments for the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOFSL will not treat recipients

as customers by virtue of their receiving this report.

Disclaimer:

The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any

other person or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for informational purpose and may not be used or considered as an offer

document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that

any investment or strategy is suitable or appropriate to your specific circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their

own investment decisions, based on their own investment objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any

recipient. Each recipient of this document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this

document (including the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views expressed may not be

suitable for all investors. Certain transactions -including those involving futures, options, another derivative products as well as non-investment grade securities - involve substantial risk and are not suitable

for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of the information and opinions contained in this document. The Disclosures of Interest

Statement incorporated in this document is provided solely to enhance the transparency and should not be treated as endorsement of the views expressed in the report. This information is subject to change

without any prior notice. The Company reserves the right to make modifications and alternations to this statement as may be required from time to time without any prior approval. MOFSL, its associates, their

directors and the employees may from time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform

or seek to perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a separate, distinct

and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of information that is already available in publicly

accessible media or developed through analysis of MOFSL. The views expressed are those of the analyst, and the Company may or may not subscribe to all the views expressed therein. This document is

being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. This

report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication,

availability or use would be contrary to law, regulation or which would subject MOFSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be

eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction. Neither the

Firm, not its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise

from or in connection with the use of the information.

The person accessing this information specifically agrees to exempt MOFSL or any of its affiliates or employees from, any and all responsibility/liability

arising from such misuse and agrees not to hold MOFSL or any of its affiliates or employees responsible for any such misuse and further agrees to hold MOFSL or any of its affiliates or employees free and

harmless from all losses, costs, damages,

expenses that may be suffered by the person accessing this information due to any errors and delays.

This report is meant for the clients of Motilal Oswal only.

Investment in securities market are subject to market risks. Read all the related documents carefully before investing.

Registration granted by SEBI, enlistment as RA with Exchange and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors

Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 - 71934200 / 71934263; www.motilaloswal.com.

Correspondence Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad (West), Mumbai- 400 064. Tel No: 022 71881000. Details of Compliance Officer: Neeraj Agarwal,

Email Id: na@motilaloswal.com, Contact No.:022-40548085.

Grievance Redressal Cell:

Registration details of group entities.: Motilal Oswal Financial Services Ltd. (MOFSL): INZ000158836 (BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst: INH000000412, BSE

enlistment no. 5028 . AMFI: ARN .: 146822. IRDA Corporate Agent – CA0579, APMI: APRN00233. Motilal Oswal Financial Services Ltd. is a distributor of Mutual Funds, PMS, Fixed Deposit, Insurance,

Bond, NCDs and IPO products.

Customer having any query/feedback/ clarification may write to query@motilaloswal.com. In case of grievances for any of the services rendered by Motilal Oswal Financial Services Limited (MOFSL) write to

grievances@motilaloswal.com, for DP to dpgrievances@motilaloswal.com.

Contact Person

Ms. Hemangi Date

Ms. Kumud Upadhyay

Mr. Ajay Menon

Mr. Neeraj Agarwal

Mr. Siddhartha Khemka

Contact No.

022 40548000 / 022 67490600

022 40548082

022 40548083

022 40548085

022 50362452

Email ID

query@motilaloswal.com

servicehead@motilaloswal.com

am@motilaloswal.com

na@motilaloswal.com

po.research@motilaloswal.com

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