Quote on GST Impact on Consumer Staples by Amit Agarwal, SVP-Fundamental Research, Kotak Securities
Below the Quote on GST Impact on Consumer Staples by Amit Agarwal, SVP-Fundamental Research, Kotak Securities
The government has reduced GST rates on almost all food items and select essential personal care categories to 5% from 12%/18%. This measure could partially revive consumption and improve growth construct (volume/mix-led growth). BRIT, NEST and CLGT are expected to be the key beneficiaries, followed by Dabur and HUVR. We see limited benefit for MRCO, GCPL, Tata Consumer and VBL. For ITC, the existing GST rate (28%) + compensation cess on Cigarettes would continue for some more time, following which the GST rate would increase to 40%, the compensation cess would be discontinued and there could be some other changes to keep aggregate taxation largely intact.
We expect volume/mix-led revenue growth starting in 3Q. Select food categories (such as namkeen and biscuits) may also see some unorganized-to-organized shift as the lower GST rate could reduce the price gap. Lastly, this GST-rate cut would offer some headroom for price increases in the medium term (H2FY27/FY28).
Above views are of the author and not of the website kindly read disclaimer
Tag News
Quote on Gold and Crude 23rd Sept 2025 by Kaynat Chainwala, AVP Commodity Research, Kotak Se...
