New Delhi: The upcoming GST slab rationalisation is expected to drive consumption and improve profitability in sectors such as automobiles, financial services, cement, and consumer staples, a report said on Monday. Passenger vehicles and commercial vehicles, currently in the 28 per cent slab, will benefit from a move to 18 per cent.
Maruti, Tata Motors, and Ashok Leyland are positioned to gain from lower effective prices and higher volumes," said the report from broking firm Motilal Oswal Financial Services (MOFS). With household consumption set to rise, the research firm forecasts the demand for financing to pick up.
ICICI Bank, HDFC Bank, and IDFC First Bank could see faster retail loan growth, while Bajaj Finance stands to benefit from lower EMIs on consumer durables. In infrastructure space, cement companies stand to gain as the GST cut from 28 per cent to 18 per cent could reduce cement prices by about 7–8 per cent.
Consumer staples stocks such as HUL and Britannia are expected to gain from lower input costs as several raw materials shift to lower slabs. Further consumer durables such as Voltas, Havells, and Amber Enterprises could see stronger volumes and players in the hospitality space, such as Lemon Tree and Indian Hotels, will become more affordable.
If GST on senior citizens’ health insurance policies is reduced from 18 per cent to 5 per cent or waived, insurers like Niva Bupa, Max Life, HDFC Life, and Star Health will benefit, the report noted. Rising demand for durables, staples, and discretionary goods will aid logistics players such as Delhivery. According to its forecast, quick commerce platforms like Swiggy and Eternal stand to gain from higher household consumption.
Footwear and other mass products shifting to lower slabs should shrink the tax arbitrage of the unorganised sector, benefiting organised players such as Relaxo, Bata, and Campus.
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