Overall, this can drive higher volumes and margin improvements, leading to potential earnings upgrades of up 5 to 10% in a number of sectors over the next year.
FinTech BizNews Service
Mumbai, September 4, 2025: The 56th meeting of the GST Council was held in New Delhi under the chairpersonship of the Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman. The GST Council inter-alia made the recommendations relating to changes in GST tax rates, provide relief to individuals, common man, aspirational middle class and measures for facilitation of trade in GST.
Mahesh Patil, CIO, Aditya Birla Sun Life AMC, feels: "The recent GST rationalisation is a significant reform, not just in simplifying the tax structure but also in providing a much-needed boost to consumption. Along with supportive factors such as a good monsoon, benign inflation, recent tax measures, and rate cuts, this move sets the stage for stronger demand momentum, particularly as we enter the festive season.
Sectors at the forefront of this reform include automobiles, which are expected to witness a revival in demand as buyers who had delayed purchases now return to the market; FMCG, where lower tax rates from 12% to 5% will improve affordability and spur rural as well as urban consumption; and consumer durables, where the reduction from 28% to 18% is likely to boost volumes in categories like appliances and electronics. Footwear and other categories are also expected to gain from lower tax incidence as the gap with the unorganized sector narrows.
Overall, this can drive higher volumes and margin improvements, leading to potential earnings upgrades of up 5 to 10% in these sectors over the next year. While the market awaits a sustained improvement in growth and clarity on global trade, these reforms mark a strong step towards reviving domestic consumption and investor sentiment."
