Consumer Durables' stocks stand to gain from GST
DSIJ Intelligence / 04 Aug 2016
Consumer Durables as a sector is expected to gain traction due to 7th pay commission; and consequently the increasing disposable income in India aided with multiple EMI facilities to purchase products.
Various sectors are expected to benefit from the lower GST rate. Consumer Durables is one sector that clearly stands to gain from not only the lower GST rate but also on the savings in the Logistics and Transportation costs. Across the sector a savings of upto 300-400 bps is expected due to warehousing rationalisation and Logistics' cost minimisation.
The current effective tax rate for the sector is 7 per cent to 30 per cent. The GST implementation is expected to benefit those companies who have not availed tax exemptions in the past.
The biggest game changer for the Consumer Durables sector with GST bill being implemented is the shift in business from unorganised sector to organised sector.
Consumer Durables as a sector is expected to gain traction due to 7th pay commission; and consequently the increasing disposable income in India aided with multiple EMI facilities to purchase products.
The major beneficiaries in the sector could be TTK Prestige, Volta, Bajaj Electricals and Symphony.
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