Mumbai: Procter and Gamble Hygiene and Health Care Ltd (PGHH), a unit of the world’s largest consumer packaged goods maker, reported a 28.6% decline in June quarter profit because of disruptions related to the implementation of the goods and services tax, or GST.

Net profit fell to Rs78.04 crore in the three months to June from Rs109.37 crore in the year-earlier quarter.

Sales volume for the quarter fell 6% from a year ago. Revenue from operations declined 5.7% to Rs529.94 crore.

The company blamed the government’s November 2016 decision to ban high-value banknotes, along with GST-led destocking in June, for its poor performance.

“The company delivered sales of Rs2,419 crore, up 3% for the full year to June 2017 versus last year despite challenges of liquidity crunch in the second quarter and trade destocking ahead of GST in the fourth quarter," the company said in a press statement released on Wednesday evening.

“The company responded to these challenges with agility and continued to strengthen brand fundamentals," it said.

P&G in India follows the July to June fiscal year.

Net profit for the year ended June increased 2.4% to Rs432.73 crore.

“Being a June year-end company, PGHH witnessed the impact of both demonetization and GST-related destocking in a single financial year, unlike peers," brokerage firm Motilal Oswal said in a 24 August note.

PGHH’s major products include sanitary napkin brand Whisper, topical ointment Vicks VapoRub, hair care brand Pantene and oral care brand Oral B.

PGHH recommended a dividend of Rs27 per share for the year ended June, the firm said in its statement.

This is subject to shareholder approval at its upcoming annual general meeting.

“Near-term valuations will look expensive because of the lower other income in FY18/FY19 compared to earlier years," the Motilal Oswal note said. “While PGHH remains one of our top long-term picks, valuations of 46.3x FY19 EPS do not leave much room for upside over a one-year horizon."

Shares of PGHH rose 0.13% to Rs8,165 while the benchmark BSE Sensex rose 0.09% to 31,596.06 points.

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