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.
Industry also hails GST rate cuts, decision to allow quarterly filing of returns.
The recent move to cut rates, analysts say, should help boost sales, particularly in the consumer durable segment over the next few months.
"The rate cut will benefit consumer durable companies like us to pass on the benefit to the consumers for the upcoming festive season. The 10 per cent cut in the television segment is of particular interest to us, as we have a good acceptability in the 22 inch and 24 inch TV size segment. The move will make the televisions more affordable for consumers in Tier 3 and 4 cities," says Nidhi Markanday, director of Intex Technologies.
Among individual stocks, Bata India hit a new high of Rs 878, up 4 per cent after India’s largest footwear retailer reported 37 per cent growth in net profit in the June 2018 quarter over the corresponding period last year.