40 Stocks That May Benefit from GST 2.0 Reforms by Modi Govt
18 Aug, 2025 14:09 IST|Sakshi Post
Prime Minister Narendra Modi's surprise Independence Day announcement to restructure India's GST structure by Diwali has sent shockwaves through Dalal Street, with over 40 equities in sectors ranging from cars to cement now firmly in brokerages' sights as possible big winners. The market's ecstatic reaction on Monday included large gains in the car, financial, real estate, consumer, and cement sectors as investors hurried to position themselves ahead of what analysts describe as the most major indirect tax overhaul since the GST's 2017 rollout.
Modi's GST revisions 2.0 aim to reduce the previous four-slab system to just two primary brackets: 5% and 18%, excluding sin products. According to market estimates, nearly 99% of commodities currently in the 12% slab will transfer to 5%, while 90% of items in the 28% category will decrease to 18%. The measures are intended to reduce retail prices by 4-5%, bringing much-needed relief to household budgets while increasing consumption across all categories.
Automobile, Cement, Consumer and Durables: Benefits of GST Rate Cut
Two-wheelers, small cars, and commercial vehicles are the sector's biggest beneficiaries, with GST rates potentially falling from 28% to 18%—a significant 10% savings. Maruti emerges as the clear leader among passenger vehicles. According to Jefferies, Maruti could benefit the most from this possible reduction in small car taxes, which are currently between 29 and 31%. The company also believes Maruti will profit from expected hybrid vehicle rate decreases.
Commercial vehicle producers Ashok Leyland, Tata Motors, and Eicher are expected to benefit from a 28% to 18% rate cut, while tractor manufacturers Mahindra and Escorts may see rates drop from 12% to 5%.
The reduction in GST rates from 28% to 18% could be a game changer for the cement business. According to estimations, the government's revenue could be affected by Rs 200-250 billion. Savings in cement costs could result in a 40-50 bps profit improvement for real estate developers, as cement accounts for 4-5% of house prices in major cities.
Air conditioners appear as huge winners, with prices potentially falling from 28% to 18%. Voltas, Blue Star, and Amber may reap benefits. Consumer staples companies like Dabur and Emami may gain because most Ayurveda goods are now taxed at 12%, which might be reduced to 5%.ICICI Bank, HDFC Bank, IDFC First Bank, and Bajaj Finance stocks might all benefit indirectly from the new GST rate drop.
In the auto sector, Maruti, Tata Motors, Ashok Leyland, Bajaj, Hero, TVS, Eicher, Mahindra, and Escorts stocks might benefit. JK and Ultratech cement stocks could benefit from the cement industry. Voltas, Havells, Blue Star, Amber, Whirlpool, HUL, Britannia, Dabur, Emami, ITC, Varun Beverages, and Patanjali Foods from Consumer and Durables.
Disclaimer: The information provided in this article is for informational purposes only and should not be considered as investment advice or a recommendation to buy, sell, or hold any security or financial product. Stock market investments are subject to market risks. Readers are advised to consult with a qualified financial adviser before making any investment decisions.
