Prime Minister Narendra Modi 's Independence Day announcement regarding India's GST restructuring by Diwali has significantly impacted Dalal Street , with over 40 stocks across various sectors identified as potential beneficiaries.
As the stock markets marked the opening for the week on Monday, it witnessed substantial gains across automotive, financial, real estate, consumer and cement sectors as investors responded to what analysts consider the most significant indirect tax reform since 2017.
The proposed GST reforms aim to simplify the current four-tier structure into two primary rates - 5% and 18%, excluding sin goods. According to market projections, 99% of goods in the 12% category will shift to 5%, whilst 90% of items in the 28% bracket will move to 18%.
"Here too, households can expect sizable savings, owing to some higher-ticket consumption items bracketed in the 28% tier. The proposals and finer details are likely to be approved by the GST Council in early 3QFY26. The Finance Ministry has indicated Rs 50,000 crore of tax revenue impact, which appears manageable," Motilal Oswal said in a research note, a squoted by ET.
The restructuring aims to reduce retail prices by 4-5%, providing relief to households whilst encouraging consumption across categories.
The automotive sector stands to gain significantly, with Jefferies identifying two-wheelers, small cars and commercial vehicles as primary beneficiaries from the proposed 28% to 18% rate reduction. "All the listed 2W OEMs – Bajaj, Hero, TVS and Eicher – should be beneficiaries of this cut," Jefferies noted.
In the cement sector, the proposed rate reduction from 28% to 18% could result in a government revenue impact of Rs 200-250 billion. "A key sentiment positive for the sector; lower GST from 28% to 18% can lead to 7.5%/8% lower prices," Motilal Oswal stated.
Consumer durables, particularly air conditioners, could benefit from rate reductions. Meanwhile, banking sector advantages include increased consumption and credit demand, with ICICI Bank, HDFC Bank and IDFC First Bank positioned as key beneficiaries.
Emkay Global anticipated these reforms will strengthen consumption over capital expenditure, potentially reducing CPI inflation by 50-60 basis points annually. However, they caution that the overall impact depends on how the government addresses the revenue deficit.
Also read: GST 2.0 tussle: Centre eyes extra duty over 40% slab on tobacco products; states push for 'significant' cut
Stocks likely to gain from GST rate cut
Brokerages have shortlisted over 40 companies across sectors that could emerge as key beneficiaries, as identified by ET analysis:
Sector Stocks Likely to Benefit
(Disclaimer: Recommendations and views on the stock market and other asset classes given by experts are their own. These opinions do not represent the views of The Times of India)
As the stock markets marked the opening for the week on Monday, it witnessed substantial gains across automotive, financial, real estate, consumer and cement sectors as investors responded to what analysts consider the most significant indirect tax reform since 2017.
The proposed GST reforms aim to simplify the current four-tier structure into two primary rates - 5% and 18%, excluding sin goods. According to market projections, 99% of goods in the 12% category will shift to 5%, whilst 90% of items in the 28% bracket will move to 18%.
"Here too, households can expect sizable savings, owing to some higher-ticket consumption items bracketed in the 28% tier. The proposals and finer details are likely to be approved by the GST Council in early 3QFY26. The Finance Ministry has indicated Rs 50,000 crore of tax revenue impact, which appears manageable," Motilal Oswal said in a research note, a squoted by ET.
The restructuring aims to reduce retail prices by 4-5%, providing relief to households whilst encouraging consumption across categories.
The automotive sector stands to gain significantly, with Jefferies identifying two-wheelers, small cars and commercial vehicles as primary beneficiaries from the proposed 28% to 18% rate reduction. "All the listed 2W OEMs – Bajaj, Hero, TVS and Eicher – should be beneficiaries of this cut," Jefferies noted.
In the cement sector, the proposed rate reduction from 28% to 18% could result in a government revenue impact of Rs 200-250 billion. "A key sentiment positive for the sector; lower GST from 28% to 18% can lead to 7.5%/8% lower prices," Motilal Oswal stated.
Consumer durables, particularly air conditioners, could benefit from rate reductions. Meanwhile, banking sector advantages include increased consumption and credit demand, with ICICI Bank, HDFC Bank and IDFC First Bank positioned as key beneficiaries.
Emkay Global anticipated these reforms will strengthen consumption over capital expenditure, potentially reducing CPI inflation by 50-60 basis points annually. However, they caution that the overall impact depends on how the government addresses the revenue deficit.
Also read: GST 2.0 tussle: Centre eyes extra duty over 40% slab on tobacco products; states push for 'significant' cut
Stocks likely to gain from GST rate cut
Brokerages have shortlisted over 40 companies across sectors that could emerge as key beneficiaries, as identified by ET analysis:
Sector Stocks Likely to Benefit
(Disclaimer: Recommendations and views on the stock market and other asset classes given by experts are their own. These opinions do not represent the views of The Times of India)
You may also like
Poisoning tragedy update: Kuwait shuts down 10 illegal methanol factories after 23 deaths
Woman with 'world's biggest lips' applies red lipstick and results drop jaws
Enzo Maresca singles out two Chelsea stars after disappointing opening day draw
American visits UK town and can't believe how much better one thing is
India's banking giant launches investment funds in UAE: Check the details here!
