Normal inventory days may be restored only by September

Software updation, non-registration of GSTN and confusion on tax rates /HSN codes impact recovery

Source: AIOCD PharmaTrac

The cut in inventory days of 23 days by end June (from 40 days in end May to 17 days in end June) is likely to take longer than expected to recover. Data from AIOCD PharmaTrac reveals that though nearly a month has gone by after the onset of GST, tracking the inventory days, both company wise, and therapy wise, the uptick in the inventory buildup slow and gradual.

Source: AIOCD PharmaTrac

Anil Khanna, Partner, WisdomSmith Adviors cites software updation at the stockist level, non-registration of GSTN by few stockists and confusion on tax rates/HSN codes of some products where variable tax rates have been applied by different companies for similar products as key issues impacting the recovery.

Khanna also informs that as a result we will only see a partial improvement in July primary sales vis-a-vis loss of June. At this rate, normal inventory days may be restored only by September.