Stock Tips- Prime Minister Narendra Modi’s announcement of reforms in the GST structure on August 15 has filled the stock market with enthusiasm. Yesterday the market closed with a gain of about one percent, while today also Sensex and Nifty are trading in the green. Companies from many sectors will benefit greatly from the reduction in GST. Brokerage house Motilal Oswal has listed 26 such stocks from 12 sectors, which will see a lot of growth due to the GST reduction.
GST on cars and bikes may be reduced. Motilal Oswal says that Maruti Suzuki, Tata Motors and Ashok Leyland will benefit greatly from this. Currently, 28 percent GST is levied on four-wheelers. It can be reduced to 18 percent.
Motilal Oswal says that GST reforms will boost consumption. The economy will grow. This may increase the demand for loans i.e. credit in the future. Credit growth may reach double digits in the second half. ICICI Bank, HDFC Bank and IDFC First Bank will benefit greatly from this. As a result, their shares will rise.
The GST reforms will also reduce the EMI obligation for consumer durables. This will benefit NBFC lending. Motilal Oswal says that Bajaj Finance is in a good position to take advantage of this opportunity.
Motilal Oswal says that GST on cement can also be reduced from 28 percent to 18 percent. This can make the rate of cement cheaper by up to 8 percent. The brokerage believes that UltraTech Cement and JK Cement will benefit greatly from this and their shares will rise.
Motilal Oswal says that consumer staples will also benefit from the improvement in the GST structure. Currently, most of the products of this sector attract 18 percent GST, but most of their raw materials fall under the GST scope of 12 percent. Due to reduction in GST on raw materials, their input costs can come down significantly. If this happens, Britannia Industries and Hindustan Unilever will be in profit.
Motilal Oswal has also expressed hope that AC manufacturing companies Voltas and Havells will also benefit from GST reform. Currently, 28% GST is levied on AC, which is expected to come down to 18%.
Motilal Oswal has also expressed hope that Electronics Manufacturing Services will also benefit from GST reform and has advised to invest in Amber Enterprises shares. This firm supplies room ACs to many companies.
Motilal Oswal has also advised to buy Lemon Tree Hotels and Indian Hotels. The brokerage said that the government can reduce GST rates from 12% to 5% for hotel rooms with room rent less than Rs 7,500. Both these companies can benefit from this.
Motilal Oswal has advised to buy four companies of the insurance sector – Niva Bupa, Max Life, HDFC Life and Star Health. The brokerage said that currently 18% GST is levied on senior citizens’ policies, but after the reforms, it is expected to come down to 5%. This can benefit companies selling health insurance and term insurance.
Motilal Oswal has advised to bet on Delhivery of logistics sector, Eternal and Swiggy of Quick Commerce and Relaxo, Bata and Campus companies of retail sector. The brokerage says that these companies will benefit from the reduction in GST and their shares will rise.
