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Sectors that may benefit the most from GST
Jan 10, 2015


The Goods and Service Tax (GST) is one of the key reforms that will bring about a structural change in the economy. The implementation of the same is bound to bring more companies under the new tax regime, thus providing a level playing field to organized players forming part of sectors having a high proportion of the unorganized segment. As reported by the Economic Times, companies with turnover of more than Rs 1 m will now have to pay the tax; the figure earlier was Rs 15 m.

As you can see, the chart above indicates that players from the footwear, plywood, textiles and sanitary-ware sectors are likely to be strong beneficiaries of this change. Battery as well as paint and adhesive manufacturers will gain from this move as well.

With news of this development coming in, stocks of companies that are slated to benefit from this change have been favored by market participants in recent times. Agreed that this structure is likely to bring in structural changes that will benefit organsied players over the long run. However, with the way markets have been running up in recent times, investors would do well to gauge the risk reward ratios of stocks that have already run up significantly - with the upsides seemingly being priced in already.

Data Source: The Economic Times

This Chart Of The Day was published in The 5 Minute WrapUp - Stock market a 'Drunken Psycho'?

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2 Responses to "Sectors that may benefit the most from GST"

shiv ram chawla

Aug 18, 2015

what types of logistic companies will get the benefit of GST

Like (5)

Nagaraj

May 31, 2015

Does. Logistic companies will get benifit from implementation of GST

Like (1)
  
Equitymaster requests your view! Post a comment on "Sectors that may benefit the most from GST". Click here!

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