Colgate stock surged after GST Council reduced tax on its products, enabling input tax credit benefits and margin gains

Fri 9 Oct 2026

FY26 margin impact

80 basis points

Structural margin improvement potential

150 basis points

Pre-tax savings potential

50 to 100 crore rupees

Portfolio shifted to lower tax bracket

95 percent

Heard on business television between 15:08:06 - 15:11:06 IST.

• GST rate on Colgate's output moved from 18% to 5% bracket, previously preventing input tax credit claims on 18% input tax.
• From 1st November, input tax credit will be available, leading to cost savings and margin improvement.
• Estimated impact is around 80 basis points for FY26 margins, with 150 basis points structural margin improvement potential.
• Pre-tax savings potential of 50-100 crore rupees expected.
• Full benefit expected by FY28, with partial benefit in FY27; 95% of Colgate's portfolio shifted to the lower tax bracket.
• Analyst Niraj said the move is positive but near-term margins could face pressure from raw material inflation, though 6-12 month upside remains.

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