GST rate cut triggers rally in footwear, paint, consumer durable stocks

GST rate cut triggers rally in footwear, paint, consumer durable stocks on Business Standard. The recent move to cut rates, analysts say, should help boost sales, particularly in the consumer durable segment over the next few months

Latest News Shares of paint, consumer durables and footwear companies rallied by up to 10 per cent on the BSE on Monday after the GST Council reduced tax rates from 28 per cent to 18 per cent on a range of daily use products and appliances. Among items on which GST was reduced on Saturday include footwear, small televisions, water heater, electric ironing machines, refrigerators, lithium-ion batteries, hair dryers, vacuum cleaners, food appliances and ethanol. The development triggered a 5 per cent to 9 per cent rally in Bata India, Relaxo Footwears, Mirza International, Khadim India, Superhouse and Liberty Shoes from the footwear sector; Asian Paints and Shalimar Paints from the paint segment; and Havells India, IFB Industries and Butterfly Gandhimathi Appliances from the consumer durables space. Asian Paints, Berger Paints, Havells India, Bata India and Relaxo Footwears hit their respective 52-week highs on the BSE. Meanwhile, ITC (up 3 per cent at Rs 282) and VST Industries (up 20

per cent at Rs 2,993) from the cigarette sector rallied up to 20 per cent over the past few months as the GST Council kept the tax rates unchanged. The recent move to cut rates, analysts say, should help boost sales, particularly in the consumer durable segment over the next few months. â&#x20AC;&#x153;The latest changes in the tax rate structure impact positively a few companies (consumer appliances/durables space) under our active coverage such as Whirlpool of India, IFB Industries, Bajaj Electricals, V-Guard Industries, Havells India and Crompton Consumer. Footwear companies like Bata India are also positively impacted. The hospitality sector will also be positively impacted," say analysts at Nirmal Bang Securities. For their part, companies plan to pass on the benefit of the rate cut to consumers going ahead to prop up sales, especially in the festive season.