Equity Alert
Pharma cos show muted reaction to GST rejig; US tariffs weigh
This story was originally published at 14:30 IST on 4 September 2025
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Equity Alert: Pharma cos show muted reaction to GST rejig; US tariffs weigh
MUMBAI--1352 IST--Indian pharmaceutical stocks showed muted reaction to the goods and services tax rationalisation by the government Wednesday. The Nifty Pharma and Nifty Healthcare indices were almost immune to the reduction in goods and services tax to 5% from 12% on all drugs and medicines intended for personal use. Analysts said that the Indian drugmakers will mostly be unaffected by the GST rate cut as major players are still worried about the US tariffs on pharmaceutical products and this will remain an overhang till the announcement of levies by Washington.
"Domestic players like Mankind Pharma and Glenmark Pharmaceuticals may get some benefit from the recently announced tax cuts. Indian customers are likely to choose branded medications over affordable drugs due to a decrease in price gap," said an analyst at a domestic brokerage. The analyst also added that the exemption of tax on drugs may boost consumption and volume in the branded market. However, there will be no material impact on major companies like Dr. Reddy's Laboratories, Sun Pharmaceutical Industries and Cipla, as their exposure to the US market is higher compared to domestic players.
"The new GST rate cut will largely impact biosimilars, which is a much smaller market as compared to the generics market... Indian pharmaceutical sector is looking for cues to the pharmaceutical tariffs threatened by the US... GST cuts will have a negligible impact on the Indian pharma market," said Param Desai, research analyst at Prabhudas Lilladher Institutional Equities.
As of 1334 IST, Sun Pharmaceutical Industries, Cipla and Dr. Reddy's Laboratories were trading in the red. Glenmark Pharmaceuticals was down 0.7%. On the other hand, Mankind Pharma was up nearly 1% and was the top gainer among the Nifty Pharma constituents. The Nifty Pharma and the Nifty Healthcare indices were marginally down. (P. Madhu Kumar)
Equity Alert: DOMS Industries, other stationery makers rise on GST rate cut
MUMBAI--1139 IST--Shares of stationery-maker DOMS Industries rose 11% to INR 2,770, its highest level since May 19, after the GST Council exempted many essential daily-life school supplies from taxes. At 1136 IST, DOMS Industries was up 8.6% at INR 2,719, rising for the fourth straight session. ITC, which also has a relatively small papers and stationery segment, was up 1%. Kokuyo Camlin was up 5% and Linc was up 3%.
The tax body has exempted school stationery supplies such as pencils, crayons, pastels, drawing charcoal, chalk, exercise books, graph books, laboratory notebooks, and notebooks from GST. Tax on boxes, pouches, wallets, and writing compendiums of paper or paperboard containing assorted stationery has been slashed to 5% from 12%. This is positive for DOMS Industries as overall these segments account for 50% of its consolidated sales, Business Today reported JM Financial as saying.
At 1136 IST, 1.36 million shares of DOMS Industries were traded on the NSE, sharply higher than the 28,707 shares traded till the same time Wednesday. (Akash Mandal)
Equity Alert: Apparel, footwear stocks gain as GST rate cut seen as positive
MUMBAI--1105 IST--Most retail and footwear stocks gained in an upbeat market after the Goods and Service Tax Council lowered tax rates on apparel and footwear late Wednesday. Trent was among the biggest gainers in the Nifty 50, giving tough competition to automobile stocks.
The 50% US tariffs, which came into effect last week, are set to impact India's textile exports in the coming months. Experts see nearly one-fourth of the country's textile exports being impacted by the tariffs over the next six months, according to media reports, even as traders grapple with order cancellations in their biggest export market.
The GST Council decided to reduce the rate on apparel and clothing accessories, knitted or crocheted, of sale value not exceeding INR 2,500 per piece. The GST on manmade fibre was reduced to 5% from 18% and that on manmade yarn was cut to 5% from 12%. The products wholly made of quilted textile material, which does not exceed INR 2,500 per piece, will be taxed at 5% from 12?rlier. Prior to this development, garments below INR 1,000 were taxed at 5%, while those above INR 1,000 attracted 12% GST. Footwear products not exceeding INR 2,500 will be taxed lower than earlier at 5% from 12%.
On the other hand, products wholly made of quilted textile material, which are priced over INR 2,500 per piece, will be taxed higher than earlier. The GST on these products has been raised to 18% from 12?rlier. The sale of footwear valued over INR 2,500 per pair will also be taxed at 18% as earlier.
The shift in price threshold is expected to drive incremental demand for branded apparel and footwear with accessibility at lower prices, ICICI Direct Research said in a report. This is seen as positive for apparel companies such as Trent, which operates Westside stores, and Arvind Fashions, which operates in the mid-to-premium branded apparels segment, the brokerage said. In the footwear section, the GST reforms are expected to aid Bata India and Metro Brands, it said.
Campus Activewear and Aditya Birla Fashion and Retail were up over 3?ch and were among the top gainers in the Nifty 500. (Simran Rede)
Equity Alert: Most life, health insurance cos up as premium exempted from GST
MUMBAI--1045 IST--Shares of most life and health insurance companies rose after the government late Wednesday announced complete exemption of goods and services tax for insurance premiums. Life and health insurance companies were earlier under the goods and services tax slab of 18%. "Exemption of GST on all individual life insurance policies whether term life, unit linked insurance plan or endowment policies and reinsurance thereof to make insurance affordable for the common man and increase the insurance coverage in the country," the finance miniatry said in a press release post GST Council's meeting.
The government has reduced the GST tax slabs from four to two--18% and 5%--in a move aimed to boost consumption and recovery in demand in the country. The next-generation GST reforms will come into play with a focus on common-man, labour-intensive industries, farmers and agriculture, health, key drivers of the economy," according to the Ministry of Finance. The new rates will come into effect from Sept. 22.
Analysts at Prabhudas Liladher Institutional Equities said the GST exemption is positive for both general and life insurance companies, and is expected to boost volume growth for the overall sector due to improved affordability. However, the brokerage said that the insurance companies may not benefit directly from the tax cut, and may pass on the additional cost to their customers, but it is still expected to cost less than the 18% GST paid by customers earlier. Insurers may see a short-term impact on profitability due to slower changes in product and pricing in their existing policies, according to the brokerage.
Among the insurance companies in the Nifty 50, shares of Bajaj Finserv rose nearly 3%, followed by HDFC Life Insurance and SBI Life Insurance, which gained around 1?ch as of 1038 IST. PB Fintech, ICICI Prudential Life Insurance and Life Insurance Corp. Of India were up 4%, 3%, and 2%, respectively. (P. Madhu Kumar)
Equity Alert: FMCG cos rise as GST on several daily-use items cut to 5%
MUMBAI--1037 IST--Shares of most fast-moving consumer goods companies rose after GST Council lowered taxes on several food and some drink products, including namkeen, cakes, pasta, cheese, noodle, chocolate, coffee, and juices. The council also reduced GST on daily-use products such as soap, shampoo, and toothpaste.
Shares of Britannia Industries were the top gainers among FMCG companies. The company is likely to benefit after the council lowered GST on biscuits and cakes to 5% from 18%, and and that on cheese to 5% from 12%. Britannia sells biscuits under major brands such as Good Day and Marie Gold. Shares of the company rose as much as 7% post the GST news and touched the highest level in 11 months at INR 6,336, only 2?low its 52-week high. At 1032 IST, shares of the company were up nearly 4.4%.
Shares of Colgate - Palmolive (India) rose as GST on toothpaste and toothbrush was cut to 5% from 18%. Shares of the company hit the highest level in over three months at INR 2,504, rising over 5%. Among others, shares of Hindustan Unilever hit their highest level in over 11 months and those of Nestle India touched a one-month high. Shares of both companies were up 1-2%.
Some part of the GST news was already priced into stocks as the plans were first announced by Prime Minister Narendra Modi in his Independence speech in August. The Nifty FMCG index was up 1% post the GST Council's nod to new rates, but the sectoral index has risen nearly 6% since Modi's speech.
In a surprise, GST on juices were cut to 5% from 12%, which led to a rise in shares of Dabur India. There were some concerns that GST on juices would be raised to 18%. Shares of Dabur India rose as much as 6% to the highest level in over 10 months at INR 577, still 16?low its 52-week high. At 1032 IST, shares of the company were up 1.8%.
Shares of ITC were up 1.5?ter the GST Council gave its approval to tax ciggrettes based on retail sale price as compared with transaction-based method earlier. Emkay Global Financial Services said in a note that the latest norm is expected to improve competitive position of ITC. Trading in ITC was largely muted as the council raised tax on cigrettes to 40% from 28%, but the new rates will not come into effect for now. The new tax rate on cigrettes will be effective once the government manages to pay off GST-related loans. (Anshul Choudhary)
Equity Alert: Auto cos surge on GST cut across segments; M&M at record high
MUMBAI--1028 IST--Automobile stocks surged after the GST Council Wednesday approved slashing rates across various automobile verticals. The move is seen spurring demand in an industry that has struggled with low sales growth and high inventories in recent times. Mahindra & Mahindra, Eicher Motors, and Escorts Kubota were up 2-6%. These stocks, alongside Maruti Suzuki India, notched all-time highs. At 1025 IST, the Nifty Auto was up 1.9% at 26264.40 points and was the top gainer among sectoral indices.
M&M was among the biggest winners in the sector, with GST on small and medium cars being slashed, while the effective tax on large cars and sports utility vehicles will fall with the government slashing cess. The GST body reduced tax on small cars, with engines below 1200 cc, to 18% from 28%. It increased GST on mid-sized and big cars to 40% from 28% but removed compensation cess. These cars were earlier taxed at 45-50%, including cess. Tax on tractors and agricultural machinery was cut to 5% from 12%.
M&M has exposure across these verticals. Around 40% of the company's SUV portfolio will fall under the 18% tax bracked, with the rest falling in the 40% bracket, Mahindra group Chief Executive Officer and Managing Director Anish Shah was reported as saying by CNBC-TV18.
Escorts Kubota was another big winner after GST reduction in tractors and agricultural machinery. Eicher Motors was up 2%. The company is likely to face some downside from the government hiking GST on motorcycles above 350 cc engine to 40% from 28%, which will affect a part of its Royal Enfield portfolio. However, a majority of the portfolio consist of motorcycles under the 350 cc segment. The company also sells trucks and commercial vehicles. (Akash Mandal)
Equity Alert: Market gains sharply post GST rate rejig, auto cos lead
MUMBAI--0945 IST--Benchmark indices opened significantly higher Thursday after the GST Council Wednesday approved a move to a two-slab goods and services tax rate structure with cut in tax rates on several consumer-related goods. The indices rose past their resistance levels. Consumer-facing sectors such as automobile and fast-moving consumer goods lead the gains in the market.
At 0940 IST, the Nifty 50 was at 24906.30, up 191.25 points or 0.8% and the BSE Sensex was at 81218.17, up 650.46 points or 0.8%. Mid-cap stocks outperformed large-cap ones, while small-cap stocks swung between gains and losses up. The India VIX, the fear gauge of the market, fell after opening higher and was down 0.9% at 10.8375.
Shares of car manufacturing companies rose sharply after the GST on small cars was reduced and the cess on bigger ones was removed in the latest GST reforms late Wednesday. Mahindra & Mahindra and Tata Motors were up over 7% and 1%, respectively. Truck and tractor makers' stocks also soared after the GST Council cut the GST on them to 5% from 12%, and 18% from 28%, respectively. Shares of two-wheeler companies rose with Eicher Motors up over 3% and TVS Motor up nearly 2%. GST on motorcycles below 350cc engine has been reduced to 18%. Nifty Auto was up over 2% and led the pack.
FMCG stocks gained sharply as the GST on several daily-use products has been cut. Britannia Industries was up 5.7%, being among the top gainers in the Nifty 200. Nestle India was up nearly 3%. ITC was up over 2% as the GST Council approved taxing cigrettes based on retail sale price. Nifty FMCG was the second biggest gainer after Nifty Auto, up 1.5%.
Insurance companies stocks rose after life and health insurance policies were exempted from GST. Nifty Financial Services was up 0.9%. Nifty IT, Nifty Oil & Gas, and Nifty Metal were the only sectors that were in the red. (Simran Rede)
Equity Alert: Indices seen sharply up after GST body cuts rates on many pdts
MUMBAI--0805 IST--Benchmark indices are likely to open higher Thursday after the Goods and Services Tax Council approved lowering tax rates on several consumer-related goods. Shares of several companies in automobile, fast-moving consumer goods, consumer durables, among others, are expected to rise.
The GST Council removed the 28% and 12% GST slabs and brought most products under the 5% and 18% slabs. It also introduced a 40% tax slab for luxury and sin goods and removed compensation cess on most products. The new rates are set to be effective from Sept. 22, except those on tobacco-related items.
Following this, GIFT Nifty futures contracts surged overnight, indicating a sharply higher gains for the Nifty 50. At 0735 IST, the September GIFT Nifty contracts traded at 24975 points, up 0.6% from its previous close and 1.1% from the Nifty 50's close Wednesday. The Nifty 50 had ended Wednesday's session at 24715.05 points.
While the Nifty 50 is likely to rise, gains might be limited as several consumption-related stocks have already seen significant gains in anticipation of the GST rate rationalisation. The Nifty Auto and Nifty Consumer Durables indices have gained nearly 7?ch since Prime Minister Narendra Modi first announced plans of the GST cuts in his Independence Day speech. The FMCG index has gained over 4% since the speech.
The GST Council reduced tax on small cars, with engine below 1200 cc, to 18% from 28%. It increased the GST on mid-size and big cars to 40% from 28% but removed compensation cess. This is a positive development as these cars were earlier taxed at 45-50%, including the cess, and the overall tax on these cars will now come down to 40%. Shares of car makers such as Tata Motors, Maruti Suzuki, Mahindra & Mahindra, among others, are expected to rise.
The council reduced the GST on motorcycles under 350 cc engine to 18% from 28%, which is likely to be positive for Hero MotoCorp and TVS Motor Company. However, the council raised GST on motorcycles above 350 cc engine to 40% from 28%, which may impact shares of Royal Enfield-owner Eicher Motors. It also reduced GST to 18% for buses and trucks from 28?rlier, which will be positive for Ashok Leyland. Among others, it has cut GST on tractors, tractor tyres to 5%.
Among FMCG products, the council reduced GST on namkeens to 5% from 12%, which likely aid shares of Bikaji Foods. It cut GST on pasta and noodles to 5%, which is positive for Nestle India. It reduced the GST on Indian breads to nil, and cut GST on daily-use items such as hair oil, soap, shampoo, toothbrush to 5%. However, the council raised the GST on drinks with added sugar, carbonated beverages to 40% from 28?rlier. This could be negative for Dabur India and Varun Beverages.
The council has also exempted all individual life insurance, health insurance policies from the GST. This is likely to be positive for several insurance companies such as Life Insurance Corp. of India, HDFC Life Insurance Co., SBI Life Insurance Co., among others.
Global cues were mixed with indices in China and Hong Kong sharply down in the morning while those in South Korea and Japan were up. US indices overnight were mixed with the Nasdaq Composite ending over 1% higher but Dow Jones Industrial Average was slightly down. (Anshul Choudhary)
Equity Alert: Most Asian mkts rise on rate cut hopes post soft US econ data
MUMBAI--0801 IST--Most Asian equity indices rose in early trade Thursday after soft employment data in the US led to hope of a rate cut by the Federal Reserve at its September meeting. The Japanese market was the biggest gainer in early trade, with the Nikkei 225 and Topix up 1.1% and 0.7%, respectively.
Gains in indices in Japan were led by banks and technology stocks as a pause in the rise of bond yields globally improved sentiment, Bloomberg reported. A rise in US technoogy stocks on Wednesday also aided tech majors in the region. Sony Group Corp. rose 3% and was among the biggest gainers in the market. "The selling pressure we saw yesterday from the rise in long-term bond yields has calmed, allowing investors to repurchase stocks," Bloomberg quoted Yutaka Miura, senior technical analyst at Mizuho Securities, as saying.
However, China's CSI 300 was down 1.5% and was the worst hit in the region. Reports said the country's financial regulators are considering cooling measures for the stock market as they grow concerned about the huge rally since the beginning of August. The Chinese market has gained nearly 8% during this period. The CSI 300 has surged more than 20% from its year's low.
Following were the levels of key Asian indices at 0757 IST:
|
INDEX |
LEVEL |
CHANGE IN % |
|
CSI 300 Index |
4391.3075 |
(-)1.54 |
|
Hang Seng Index |
25226.77 |
(-)0.46 |
|
Nikkei 225 Day |
42411.72 |
1.13 |
|
TOPIX FIRST SECTION |
3070.86 |
0.72 |
|
KOSPI |
3200.17 |
0.49 |
|
FTSE Singapore Strait Times |
4299.38 |
0.23 |
|
S&P/ASX 200 Index |
8813.90 |
0.86 |
(Akash Mandal)
Equity Alert: Nasdaq, S&P 500 rebound on Alphabet surge, econ data caps gains
MUMBAI--0739 IST--The Nasdaq Composite and the S&P 500 rebounded, while the Dow Jones Industrial Average ended slightly lower Wednesday as soft economic data capped gains. Heavyweight Alphabet surged on a favourable ruling in the ongoing antitrust case, helping the overall market end higher despite economy-related concerns.
Job openings in the US fell 176,000 to a 10-month low of 7.18 million in July, lower than the forecast of 7.28 million by Reuters. The metric is an indicator for labour demand in the economy. Despite cooling demand for workers, layoffs remained relatively low and fewer workers engaged in job-hopping, the US Labor Department's data showed.
Among stocks, Alphabet surged after a US district court ruled that Google could keep its Android operating system and Chrome browser, which investors had feared would be stripped by the ruling. The stock notched an all-time high following the ruling.
However, persistent high bond yields globally weighed on the equity market. Investors are concerned that the upward pressure on long-term government bond yields creates headwinds for equity valuations, Reuters cited Bill Sterling, global strategist at GW&K Investment Management, as saying. The 30-year Japanese government bond yield hit an unprecedented 3.28% on Wednesday, a day after selloffs in similarly dated British gilts, US Treasuries and Canadian bonds, Reuters reported.
Following are the closing levels of US indices Wednesday:
| INDEX | LAST LEVEL | CHANGE IN % |
| Dow Jones Industrial Average | 45271.23 | (-)0.05 |
| NASDAQ Composite | 21497.727 | 1.02 |
| S&P 500 | 6448.26 | 0.51 |
(Akash Mandal)
End
US$1 = INR 88.09
Edited by Deepshikha Bhardwaj
All prices from National Stock Exchange, unless otherwise specified.
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