In autos, analysts note that vehicles in the 28% tax slab could see lower rates, lifting demand for two-wheelers, passenger vehicles and tractors. Stocks such as Hero MotoCorp, Maruti Suzuki, M&M and Escorts Kubota are seen as the key gainers.
“Autos especially two-wheelers stand to benefit the most since price cuts can meaningfully influence buying decisions, while RBI’s rate cuts may further support vehicle credit growth,” said Christy Mathai, equity fund manager, Quantum AMC.
The Nifty’s Auto index advanced the most across sector indices on Monday, jumping 4.2%. Maruti Suzuki soared 8.9%, HeroMotoCorp surged 6% and M&M gained 3.5%. Consumer Durables, Realty and Metals indices rose between 1.8% and 3.4%.
While the cement sector stands to gain from improved affordability, a lower tax burden in consumer and retail may spur discretionary spending, lifting demand across FMCG, lifestyle and staples.
“For consumer durables such as air conditioners, companies are still grappling with high inventory, which will need to be cleared before new tax benefits translate into stronger demand,” said Mathai. “While cement may see lower GST as well, though the extent of benefits to end real-estate and infrastructure users remains uncertain.”Financials, particularly lenders with large retail loan books, are seen as indirect winners as a GST cut may drive credit growth in autos, housing and consumption. “Insurance could also gain if the long-pending GST reduction on health and general insurance is implemented,” said Mathai.
