FMCG, consumer durables, cement stocks rally on GST reforms

New Delhi: FMCG, consumer durables and cement stocks rallied on Thursday as common use items from hair oil to ice creams and TVs will cost less after the GST Council on Wednesday approved a complete overhaul of the tangled Goods and Services Tax (GST) regime.

The GST Council approved limiting slabs to 5 per cent and 18 per cent, effective from September 22 -- the first day of Navaratri.

Shares of Britannia Industries surged 7.18 per cent, Dabur India climbed 6.14 per cent, Colgate Palmolive rallied 5.21 per cent, Emami jumped 4.62 per cent, Hindustan Unilever edged higher by 4.34 per cent and Nestle India went up 3.63 per cent on the BSE.

The BSE FMCG index climbed 0.70 per cent to 21,076.15.

Among consumer durables stocks, Blue Star surged 4.57 per cent, Whirlpool of India climbed 4.19 per cent, Amber Enterprises went up 3.48 per cent, V-Guard Industries advanced 2 per cent, and Havells India (2 per cent).

The BSE Consumer Durables index traded 0.38 per cent up at 62,552.58.

Among cement stocks, Orient Cement rallied 2.97 per cent, UltraTech Cement advanced 2.92 per cent, Shree Cement climbed 2.75 per cent and ACC went up 2.36 per cent.

Almost all personal-use items and aspirational goods for the middle class, like AC, washing machines, will see rate cuts as the government looks to boost domestic spending and cushion the economic blow of the US tariffs.

Common use food and beverages ranging from butter and ghee to dry nuts, condensed milk, cheese, figs, dates, avocados, citrus fruits, sausages and meat, sugar boiled confectionery, jam and fruit jellies, tender coconut water, namkeen, drinking water packed in 20-litre bottles, fruit pulp or fruit juice, beverages containing milk, ice cream, pastry and biscuits, corn flakes and cereals, and sugar confectionery are likely to see a cut in tax rate to 5 per cent from the current 12 per cent or 18 per cent.

Consumer goods such as tooth powder, feeding bottles, tableware, kitchenware, umbrellas, utensils, bicycles, bamboo furniture and combs will see a rate cut from 12 per cent to 5 per cent. The same on shampoo, talcum powder, toothpaste, toothbrushes, face powder, soap and hair oil has been cut down from 18 per cent to 5 per cent.

Cement will cost less with the tax rate coming down from 28 per cent to 18 per cent.

"Some of the key sectors that stand to benefit from this are insurance, FMCG, automobiles, agriculture equipment, cement, consumer durables, apparel, footwear, QSR, and retail," Pranav Haridasan, MD and CEO, Axis Securities, said.