Stock market today: Auto, cement to consumer durables —experts bullish on these segments after GST Council meeting
GST Council Meeting: The GST Council, led by Union Finance Minister Nirmala Sitharaman, introduced significant rate cuts on Wednesday, representing the most substantial reform of the GST framework since its launch on July 1, 2017. Covering sectors from healthcare and education to everyday consumer goods, the federal indirect tax body extended a major Diwali gift to Indian consumers.
The revised GST rates will take effect from September 22, coinciding with the first day of Navratri.
“The recent GST reforms are expected to have a significant impact on the capital market and various industries in India. The proposed two-slab GST structure, with rates of 5% and 18%, aims to simplify the tax system and reduce compliance burdens,” said Seema Srivastava, Senior Research Analyst at SMC Global Securities.
The Indian stock market is likely to react positive, welcoming the significant step taken by the government. “For companies, this reform reduces compliance headaches and makes planning a lot easier. For ordinary people, cheaper taxes on many everyday products could encourage spending. If demand rises, it directly helps sectors such as FMCG, auto, and consumer appliances. That’s why the stock market has welcomed this step, as stronger demand usually shows up in better earnings,” said Ravi Singh, SVP – Retail Research, Religare Broking.
Sectors which are likely to remain bullish after the GST Council Meeting –
These are the key sectors that are likely to benefit include, according to market experts.
Consumer Goods
GST rates on everyday essentials such as toothpaste, talcum powder, and shampoos will be reduced from 18% to 5%, making them more affordable and likely boosting sales and revenue growth for companies like Hindustan Unilever and ITC.
Electronics
A GST rate cut from 28% to 18% on TVs and ACs is expected to drive festive season demand, potentially benefiting companies such as Voltas and Havells.
Auto
The GST rate on small petrol-hybrid cars will be reduced from 28% to 18%, boosting green mobility and benefiting automakers such as Tata Motors and Maruti Suzuki. In contrast, luxury electric vehicles priced above $46,000 will see GST rise to as high as 40%, affecting brands like Tesla and Mercedes-Benz.
Cement Sector
Cement producers such as UltraTech Cement and JK Cement could gain from the reduced GST rates, which may result in lower prices and increased demand.
Retail and Consumer Durables
Lower GST rates may boost volumes and sales for companies such as Delhivery, Swiggy, and Zomato, while NBFCs like Bajaj Finance are likely to gain from higher consumer durable lending.
“These changes are expected to stimulate consumption, support manufacturing, and strengthen India’s economy. The impact on government revenue and potential challenges in implementation will be crucial to monitor. Overall, the GST reforms are expected to boost economic growth, improve tax compliance, and increase investor confidence in the Indian stock market,” said Seema Srivastava of SMC Global Securities.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.