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Informist, Monday, Aug. 18, 2025                                      Tel +91 (22) 6985-4000

Equity Alert: FMCG cos rise on hope of lower GST on pdts; Nestle up over 6%

MUMBAI--1055 IST--Shares of several fast-moving and consumer goods companies rose Monday amid reports of the government considering to do away with 12% and 28% goods and services tax slab, which may lead to several FMCG products shifting to the lower tax slab of 5%. This is likely to boost demand for FMCG products as prices come down, analysts said.

Analysts at Emkay Global Financial Services said in a webinar Monday that lower GST will boost consumption in a big way. They expect a strong revival in consumption in the coming quarters. Monday, Nifty FMCG snapped its three-session losing streak and rose over 2%. At 1051 IST, the sectoral index was at 55601 points, up 1.7%.

Shares of Nestle India were up 6%, those of Dabur India were up 5% while Hindustan Unilever rose 3%. Among others, shares of Britannia Industries, Colgate India, Tata Consumer Products, and Emami rose 2-3%.

Brokerage Nomura highlighted in a report that most of the FMCG products are in 18% slab. However, there are several products that fall in the 12% bracket and demand for these products will improve if they shift to 5% slab, Nomura said. "Given the rule of anti-profiteering under GST, we expect companies to pass down the benefit to consumers which will lower the price of these daily essentials and can lead to some household saving and support overall pick-up in demand environment," Nomura said in the report.

Nomura expects a positive impact on food-related products in the snacks category, which are mostly in 12% category currently. Considering this, Emkay expects Bikaji Foods International to be the biggest beneficiary in the FMCG space from a shift to lower GST. Shares of Bikaji Foods were up over 5% at INR 758.85.

Nomura expects 30-33% sales of Nestle India and 4-5% sales of Britannia and Dabur to benefit from lower tax on food products. Shares of Nestle India were among top gainers in the Nifty 50 index Monday and up nearly 7% at INR 1,164.90 – the highest level in three weeks.

Nomura expects some products to move to 18% tax bracket from 12%, which will be a negative for the companies. It expects juices to be in the 18% tax slab, which will hit almost 15% of sales of Dabur. 

Some media reports said cigarettes might be put under the highest 40% tax slab, which would hurt demand for products. Shares of Godfrey Phillips India were down nearly 5% and those of ITC were down 0.3%. "As per media, the 28% GST rate for sin goods will rise to 40% with compensation cess going away. We believe it is not as straight forward as highlighted in the media and expect the compensation cess to be replaced with some other form of cess (maybe health cess, etc.) as by making only these two changes, the tax on cigarettes can ideally go down by 30% and realisation for cigarette companies assuming no change in retail price would rise by 43% – which cannot happen. Thus, we need more details to reach an accurate conclusion," Nomura said.  (Anshul Choudhary)

Equity Alert: Consumer cos up on proposed GST reforms; AC, shoe mfg cos soar

MUMBAI--1041 IST--Most consumer durables stocks surged Monday on reports of the government looking to rationalise the GST structure and continue with only two slabs, which is likely to reduce taxes on consumer durable goods such as air conditioners and thus boost demand. Shares of PG Electroplast, Amber Enterprises India, Blue Star, and Voltas were up 6-9%. At 1034 IST, the Nifty Consumer Durables index was up 3.1% at 38490.15 points.

"99% of items in the 12% bracket are expected to move to 5%, while around 90% of goods in the 28% slab may shift to 18%...air-conditioners may benefit from a shift to 18%," Nomura Global Markets Research said in a report. "AC manufacturers were already proposing for an 18% rate GST for 5-star rated products which would shift demand to more energy efficient products and lower overall power consumption...as of now, only ACs and >32-inch TVs fall under 28% GST which can potentially entirely shift to an 18% GST regime," the brokerage added. This shift would lower prices for consumers by 8% and benefit demand, it added. 

The brokerage also said it will help clear out excess channel inventory, which will be beneficial for AC makers such as Voltas, Havells, and Blue Star. "However, with the upcoming BEE (Bureau of Energy Efficiency) norms coming into effect from January 2026 for ACs which would raise the cost of product by 3-5%, the net reduction for the consumer would be marginal at best and would depend on the upcoming summer season," it added.

Footwear companies could see benefit in the sub-INR 1,000 portfolio, the brokerage added. Bata India and Relaxo Footwears were up over 8% each.  (Akash Mandal)

Equity Alert: Nifty Auto at over 9-month high on likely GST reforms

MUMBAI--1004 IST--Automobile stocks surged in early trade Monday after reports said the government is looking to rationalise goods and services tax slabs. Analysts see the proposed GST reforms being a key trigger to revive demand in a struggling sector. Hero MotoCorp, Maruti Suzuki India, Bajaj Auto, and Ashok Leyland were up 5-8%. At 1002 IST, the Nifty Auto was up 4.3% at 25166.40 points and the top gainer among sectoral indices, and close to an over nine-month high. All stocks in the index were in the green.

In case taxes on automobiles are lowered to 18% from 28%, it could boost demand by 15-20%, Nomura Global Markets Research said in a report. "A common rate of tax for small cars and SUVs may also hand a significant advantage to SUVs," the brokerage added. However, electric vehicles will be at a disadvantage if tax is raised to 18% from the existing 5%, the brokerage said. These assumptions are based on reports that all automobiles could be taxed under a common slab to end disputes arising due to classification by engine

size and length.

Morgan Stanley sees personal vehicles currently in the 28-31% tax bracket moving to the 18% bracket, while the remaining vehicles such as luxury cars will be taxed at 40%. Currently, luxury vehicles are levied a cess of 20-25% over and above the GST rate of 28%. The brokerage believes that Hero MotoCorp and Eicher Motors will be the biggest gainers from the reforms among two-wheeler makers, while Maruti Suzuki and Mahindra & Mahindra will benifit the most in the passenger vehicles segment.

The proposed GST reforms may be a booster shot for the sector, which has been weighed by a demand slowdown over the past year despite measures such as heavy discounts, income tax reform, and a rate cuts by the Reserve Bank of India.  (Akash Mandal)

Equity Alert: Indices surge amid proposed GST reforms; Nifty Auto rises 4%

MUMBAI--0934 IST--Benchmark indices opened sharply higher Monday following reports of the government planning reforms in goods and services tax and bringing most goods under two GST rates of 5% and 18%. Additionally, India's rating upgrade by S&P Global Ratings kept the sentiment positive. Index heavyweights such as HDFC Bank and ICICI Bank contributed around 0.2% to the Nifty 50's rise.

At 0931 IST, the Nifty 50 was at 24981.35, up 350.05 points or 1.4% and the BSE Sensex was at 81659.89, up 1062.23 points or 1.3%. Volatility in the market rose sharply, with India VIX, the market's fear gauge, at 12.7400, up 3.1%. Broader market indices also surged in early trade, with the small-cap indices being 0.7-0.8% higher and the mid-cap indices up 1.1-1.2%.

Most sectoral indices were in the green with Nifty Auto rising 4% to its highest level since October 2024. The Nifty Consumer Durables Nifty consumer durables was up over 3%. Most automobile and consumer durables stocks pushed the market higher. Emkay Global Financial Services sees the automobile, durables, and cement sectors benefiting from the reforms in GST rate slabs.

Most information technology stocks traded lower. In the Nifty 50, HCL Technologies, Larsen & Toubro, and ITC were down 0.4-0.8% – the worst hit. Nifty Pharma and Nifty Healthcare were also down over 0.2% each. Dr. Reddy's Laboratories and Sun Pharmaceutical Industries were among the worst hit in the Nifty 50, down 0.3% each.  

US President Donald Trump on Saturday hinted that the US may hold back additional secondary tariffs on India, which was due to its purchase of Russian crude oil. The Brent crude October futures contract remained below the $70-per-barrel mark, for the 11th session, from $80 per barrel hit in April. At 0933 IST, the Brent crude contract traded on the Intercontinental Exchange was marginally down at $65.83 per barrel.  (Simran Rede)

Equity Alert: Nifty 50 seen sharply higher Mon on reports of GST reforms

MUMBAI--0810 IST--Benchmark indices are likely to open sharply higher amid reports of the government planning to bring most goods under two GST rates of 5% and 18%. The government has given a recommendation to the GST Council to do away with the 12% and the 28% tax slabs, a senior government source had told Informist Friday. It has also proposed a 40% tax on a few sin goods.

The GIFT Nifty suggests a sharp rise in the Nifty 50 on Monday. At 0754 IST, the August contract of the GIFT Nifty traded at 24926 points, up 1.3% from its previous close. Last week, the Nifty 50 ended at 24631.30 points.

Emkay Global Financial Services has raised its target for the Nifty 50 after media reports on GST rates. It raised the Nifty 50 target to 28000 points for September 2026, from its earlier target of 26000 points for March.   

"India's GST rationalisation is growth-accretive, big-ticket reform. We see this as a major market mover...," Emkay's head of reserach and Strategist Seshadri Sen said in a note. "...this speeds up formalisation of the economy and improves competitiveness of Indian companies." Sen said the lower GST rates would boost consumption and sees it positive for automobile, air conditioners, and the cement sector.

Cues from global markets were mixed Monday. Most Asian markets were higher wth indices in Hong Kong, Japan, China up 0.3-0.8%. US markets were muted Friday with S&P 500 and Nasdaq Composite slightly down and the Dow Jones Industrial Average ending slightly higher.

US President Donald Trump and Russian President Vladimir Putin met in Alaska, which was seen as an effort to push Russia to make a deal with Ukraine. However, both leaders did not reach a deal over the war between Russia and Ukraine. However, Putin did say they had come to "an understanding", The Hindu reported.  (Anshul Choudhary)

Equity Alert: Most Asian indices up as crude falls; Japan mkt at record high

MUMBAI--0808 IST--Most Asian indices were higher in early trade Monday, buyoed by lower oil prices as fears of risks to Russian oil supplies eased on hopes of a truce between Russia and Ukraine. Japan's Topix and Nikkei 225 notched fresh record highs early in the session.

US President Donald Trump will meet Ukrainian President Volodymyr Zelenskyy and other European leaders Monday to discuss the truce terms, having met Russian President Vladimir Putin Friday. 

Japan's Topix and Nikkei 225 were up 0.6% and 0.8%, respectively, with Uniqlo-brand owner Fast Retailing leading the gains. However, technology heavyweights weighed on the Nikkei, with SoftBank Group and Sony Group falling 0.4% each. However, South Korea's Kospi was down 1.2% and was the worst hit in the region. KB Financial Group, Hana Financial Group, and HD Hyundai Electric fell 3-4%. 

Singapore's FTSE Singapore Straits Times was down 0.5%. The country's non-oil domestic exports fell 4.6% on year in July, worse than the 1.8% fall expected by Reuters. The June reading was upwardly revised to a 12.9% rise.

Following are the levels of key Asian indices at 0804 IST:

(Arya S. Biju)

Equity Alert: US mkt soft on mixed econ data; Dow Jones hits record high

MUMBAI--0739 IST--US equity indices ended the week on a muted note Friday with the Nasdaq Composite and the S&P 500 ending slightly lower, while the Dow Jones Industrial Average closed a tad higher after hitting a record high intraday. Mixed economic data added uncertainty about the US Federal Reserve's next rate decision in September. Investors also assessed a meeting between US President Donald Trump and his Russian counterpart Vladimir Putin with hops of a resolution to the ongoing conflict in Russia.

UnitedHealth Group surged 12% after Berkshire Hathaway bought 5 million shares in the company, providing hope of a turnaround of the insurer that is struggling amid rising healthcare costs and changes to government reimbursement plans, Reuters reported. Intel rose 3% after a report said the Trump administration was in talks for the US government to potentially buy stake in the chipmaker. Bank of America ended 2% lower after Berkshire Hathaway reduced its stake in the second-biggest US lender by 4.2% to around 8%. 

Economic data of the day was mixed, with retail sales rising as expected in July, but consumer sentiment weakened in August. Retail sales rose 0.5% in July, matching the Reuters estimate. The figure for June was upwardly revised to a 0.9% rise from 0.5%. However, the Consumer Sentiment index fell to 58.6 in August from 61.7 in July, lower than the Reuters estimate of 62. Hopes of a rate cut by the Fed were dented after the mixed data, with the CME Fedwatch tool showing an 84.6% probability of a 25 bps rate cut in September compared to the 85.4% probability a day ago. 

Following are the closing levels of US indices Friday:

(Akash Mandal)

US$1 = INR 87.41

End

Edited by Vandana Hingorani

All prices from National Stock Exchange, unless otherwise specified.

All percentage changes for share prices are rounded off to the nearest whole number; percentage changes for index values are rounded off to one decimal place.

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