Not all are winners in India's GST 2.O regime. These stocks are losing already

While India's GST reforms are hailed as a catalyst to spur growth and reward equity investors, not all stocks have emerged as winners. The GST on coal was raised to 18% from the earlier 5%, impacting power stocks. In Thursday's trade, Coal India remained flat, while NLC India, Tata Power, and JSW Energy fell over 1% each.

Further, aerated and energy drinks were hit with a 40% GST—the highest bracket in the current indirect tax regime. Varun Beverages, a key player in this segment, declined 1.5% in today's trade.

In the auto space, tax cuts on cars, tractors, and two-wheelers could boost demand for companies with a strong presence in entry and mid-range segments. However, premium and luxury-focused auto companies may face headwinds. Hyundai India, known for its premium offerings, fell about 1% in afternoon trade.

The shares of Delta Corp and Nazara Technologies came under heavy selling pressure on Thursday, sliding over 7%, as both companies fell on the wrong side of the GST overhaul. The government proposed a 40% tax on casinos, betting, and online money games.

Surprisingly, shares of ITC and Godfrey Phillips rose despite the 40% tax on cigarettes and tobacco. ITC derives a major portion of its revenue from cigarettes. Analysts say the move removes tax uncertainty and could benefit the company in the long run, though higher taxes may affect sales in the near term.

GST changes

India has announced two key tax rates of 5% and 18%, effective September 22. Experts say this will likely offset tariff impacts to some extent and boost consumption.

A new 40% tax slab will apply to high-end goods, but all additional levies above that are abolished, lowering effective rates on mid-size and large cars.

The cuts are expected to lift sales of FMCG firms such as HUL, Nestle, and Godrej Industries, while reducing costs for farmers. They will also abolish tax on individual life and health insurance products sold by LIC, SBI Life Insurance, and ICICI Prudential Life Insurance.

The government estimates the cuts will cause a revenue loss of Rs 48,000 crore ($5.5 billion), far lower than economists’ estimates of Rs 1–1.8 lakh crore.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)