Mini budget? Stocks and sectors to gain a lot of profit from bumper cuts
According to market expert Anil Singhvi, the government’s recent GST reforms reached the mini budget, one of the largest tax cut packages since the company’s tax cuts in 2019. These massive GST reduction rates cover almost all sectors of expected relief and are expected to stimulate consumption, business growth and market confidence.
“This is not a change in plastic surgery, but a major overhaul. It’s perhaps the biggest GST cut we’ve seen, benefiting almost every area that needs it,” Singhway said.
Large-scale GST cuts: Who benefits?
Small car: In gasoline engines below 4 meters, the GST dropped from 28% to 31% to 18%, up to 1,200 cc or up to 1,500 cc for diesel.
Add Zee business as your preferred source
Large SUV: GST dropped from 43-50% to 40%.
Electric Vehicles: Continue to enjoy a 5% discount on GST.
Two-wheeler: Bicycles below 350 cc are reduced from 28% to 18%; tax rates above 350 cc are 40%.
Commercial Vehicles: GST dropped from 28% to 18%.
Tractors and agricultural machinery: GST was cut from 12% to 5%, increasing farmers’ affordability.
GST Reform: Winners and Stocks
1) Life and Health Insurance (GST is now zero): LIC, HDFC Life, SBI Life, ICICI Prudential, Motilal Oswal Financial Services, Niva Bupa
2) Two-wheeler, small cars, auto parts (GST 28% to 18%): Eicher Motors, Hero Motocorp, TVS Motors, Ashok Leyland
3) Small Tractor (GST 12% to 5%): Mahindra & Mahindra, Sml Isuzu, Swaraj Engine
4) Cement (GST 28% to 18%): Ultratech Cement, Shree Cement, Ambuja Cement
5) Electronics (TV, AC, etc., GST, 28% to 18%): Voltas, Blue Star, Dixon Technologies, Amber Enterprises
6) Daily food (butter, ghee, cheese, namkeen, dried fruit GST dropped to 5%): ITC, Nestle, Britannia, Dabur, Marico, Marico, ADF Foods
7) Chocolate and Coffee (GST dropped from 18% to 5%)
8) Daily necessities (soap, shampoo, toothpaste GST reduced from 18% to 5%): Godrej consumer products, Hindustan Unilever, Patanjali
9) Drugs (Zero GST for cancer drugs, other drugs dropped from 12% to 5%): Human Pharmaceuticals
10) Kitchenware and chimney (GST 12% to 5%): La Opala, Carysil, Butterfly Gandhimati
11) Hotel (Rs less than Rs 7,500 reduced from 12% to 5%): Lemon Tree, Royal Orchid, Taj Mahal GVK, Park Hotel
12) Agrochemicals and fertilizers (GST 12% to 5%): Rashtriya Chemicals and fertilizers, Facts, Chambal Fertilizers, Coromandel International
Economic impact and market prospects
Market expert Anil Singhvi noted that the government will initially lose about Rs 4.8 billion in GST revenue, but is expected to be compensated by higher consumption and economic activity.
“These GST reforms lay the foundation for major market gatherings,” Singhway said. “Nifty will soon be able to target the range of 24,950 to 25,150.”
He added that tax cuts would ease tariff tensions and support economic growth, but warned that challenges remain: addressing tariff issues, boosting corporate revenues and curbing sales pressure from foreign institutional investors.
Experts expect growth from October to March to improve, driven by these reforms.
ITC Factors: What Investors Should Know
Singhvi warns investors to keep an eye on the impact of the input tax credit (ITC). While consumers are clearly benefiting from lower GST rates, companies may not see proportional profit increases due to ITC adjustments.
“Certain sectors, such as insurance, medicines, cement, personal care and budget hotels, may see limited gains due to ITC restrictions,” he explained. “Net network, the company’s profits depend on the balance between volume increase and ITC restrictions.”
