What Stocks Are Bulls Chasing on GST Reform Hopes?

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GST Reform: Autos, Banks, Consumer Goods, Insurance Among Big Beneficiaries of Rate Cut

By S JHA

MUMBAI, August 19, 2025 — The proposed changes in GST rates, including a reduction of the 28% slab to 18% for several categories, could unlock significant demand across India’s consumption and services sectors, claimed analysts. Stock markets lapped up consumption stocks on Monday, with shares of Maruti, Nestle, and Hero Motocorops leading the bull charge on the bourses.

The street is watching developments closely as Prime Minister Narendra Modi held a meeting with economists on NexGen GST reforms. The equity markets reacted with gains in yesterday’s session, with hopes that GST reforms may unlock consumption potential of the Indian economy.

According to sectoral analysis, autos, banks, consumer durables, cement, and insurance stand out as the biggest beneficiaries of the reforms.

Autos and Banks Lead Gains

“Passenger vehicle majors such as Maruti, Tata Motors, and Ashok Leyland are expected to benefit directly from the shift of four-wheelers from the 28% GST slab to 18%, making cars more affordable,” read a note by a brokerage firm shared with investors.

It further stated that “banks including ICICI Bank, HDFC Bank, and IDFC First Bank could see a consumption-led boost, as lower tax rates stimulate demand for credit and retail loans.”

NBFCs and Cement Boost

“Bajaj Finance may gain from reduced EMI obligations for consumer durables, while cement makers Ultratech and JK Cement could benefit from lower GST on construction inputs, cutting prices by 7.5–8%,” added the note.

Consumer Staples and Durables

FMCG majors like Hindustan Unilever (HUL) and Britannia are expected to benefit as many raw materials fall under the 12% GST rate, said the analyst in the note.

“In consumer durables, Voltas (air conditioners) and Havells (with ~24% topline from Lloyd) stand to gain from lower GST on appliances from 28% to 18%,” the note further stated.

Hotels and Insurance

Hotel chains Lemon Tree and Indian Hotels could see improved margins as GST on sub-₹7,500 room inventory drops from 12% to 5%. “In insurance, players such as Niva Bupa, Max Life, HDFC Life, and Star Health may benefit if senior citizens’ policies — currently taxed at 18% — are reduced to 5% or fully exempted,” claimed the note by the analyst.

Logistics, Retail, and Quick Commerce

“Delhivery is expected to gain from increased e-commerce and electronics shipments, while Swiggy and Eternal could benefit from higher consumption routed through quick commerce,” the note further stated. It also claimed that “companies in the retail sector such as Relaxo, Bata, and Campus could gain as GST rationalisation narrows the price gap between organised and unorganised players, driving demand for branded products.”

Analysts suggest that the GST rationalisation may provide a broad consumption push while ensuring tax certainty, benefiting both corporate earnings and consumer demand.

(Disclaimer: This article makes no recommendation for buy or sell of shares of any company)