Colgate to get input tax credit benefit from GST rate rationalisation effective November 1, boosting margins

Fri 9 Oct 2026

FY26 margin impact

80 basis points

Structural margin improvement potential

150 basis points

Pre-tax savings estimate

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 council shifted Colgate's output tax from 18% to 5%, but earlier it couldn't claim input tax credit on 18% paid on inputs.
• From November 1, input tax credit will be available, leading to cost savings and margin improvement.
• Nomura estimates ~80 basis points FY26 margin impact, with 150 basis points structural margin improvement potential and pre-tax savings of Rs 50-100 crore.
• Benefit flows partially in FY27, full benefit expected in FY28; stock surged on the news.
• Analyst Neeraj said near-term inflation could pressure margins, but medium to long term stock still has value.

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