The markets have seen a smart rally today after several days of lacklustre trade. The news of GST reforms by Diwali and a potential 2-rate structure buoyed sentiment significantly.
Some of the key segments/sectors that stand to benefit include consumer staples on the back of better demand, lower raw material costs, automobiles, especially four-wheelers, cement, hotels, retail consumer durables.
Motilal Oswal’s 25 stocks to watch on potential GST changes
The Government has proposed that most goods be subsumed in the 5% and 18% GST slabs and there are talks of doing away with the existing 12% and 28% slabs.
Almost 99% of the goods currently in the 12% slab (standard goods) are expected to be transitioned to the 5% slab, “which should lower retail prices by 4-5%, aiding household budgets. 90% of the goods in the 28% slab will likely be moved to 18%,” as per Motilal Oswal.
Motilal Oswal has created a sector-wise breakup of the key stock beneficiaries from Britannia, Maruti, Ashok Leyland, Ultratech to Voltas, LemonTree, HDFC Bank, and Bajaj Finance.
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Motilal Oswal lists out 3 auto stocks that could potentially benefit from the 2-rate GST structure
-Maruti Suzuki: As per Motilal Oswal, “four-wheelers are in the 28% slab and should benefit from 18% GST rate”
-Tata Motors: Even this is another counter that Motilal Oswal believes could benefit fron the 18% GST rate.
-Ashok Leyland: “CVs can benefit from the lower GST of 18% Vs 28% currently.”
Banks
“The banking sector benefits as a whole, with consumption expected to pick up,” as per Motilal Oswal. The household confidence and demand for debt increase may drive “credit growth into double digits in H2FY26 and direct benefits for consumer-heavy lenders and credit card players,” as per the brokerage house.
Key stocks in focus include – ICICI Bank, HDFC Bank, IDFC First Bank
NBFCs
Bajaj Finance is another key stock that may benefit from lower “EMI obligation for consumer durables,” as per Motilal Oswal. NBFC lending in consumer durables is expected to get a boost.
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The two cement stocks that may see significant advantage if the rates are reduced to 5% and 18% include UltraTech Cement and JK Cement.
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