GST Rate Cuts Power FMCG, Consumer Durables & Footwear Stocks | ITC, HUL, Britannia, Bata India Surge in Stock Market Today

Market Performance

The stock market kicked off September 4 with strong momentum, as consumption-driven stocks dominated trade. The sharp rally was led by automobile and FMCG counters, driven by the GST Council’s latest tax reforms.

Investors shifted focus to fast-moving consumer goods (FMCG), consumer durables, and footwear names, with Nifty FMCG and Nifty Consumer Durables indices leading the pack. Several frontline stocks such as ITC, HUL, Britannia, Colgate Palmolive, Dabur, and Bata India rallied sharply, while durable plays like Whirlpool, Amber Enterprises, Dixon Technologies, and PG Electroplast also posted healthy gains.

The broader GST structure has now been simplified into two slabs—5% and 18%—with a higher 40% ‘sin tax’ maintained. The earlier 12% and 28% categories have been scrapped, creating a more uniform and consumption-friendly tax regime.

Main News: GST Cuts Ignite Consumption Stocks

The market cheer was largely due to the revised GST slabs, which reduced rates across a wide range of consumer goods. This fueled expectations of lower prices, improved affordability, and higher consumer demand.

• Food & beverages: Earlier placed under 5%, 12% and 18% brackets, now consolidated with most items moving to 5%.
• Consumer durables: High-ticket items like air conditioners, dishwashers, and televisions (>32 inches) shifted from 28% to 18%.
• Footwear: Products priced below ₹2,500 now attract just 5% GST, compared to the earlier 12%.

The immediate impact was visible in early trade on September 4, with FMCG and footwear counters seeing the sharpest moves.

Company-Wise Impact

FMCG Leaders: ITC, HUL, Britannia, Colgate, Dabur

The FMCG index saw a broad-based rally as companies across food, dairy, and home-care segments benefited from rate cuts.

• ITC: Gains seen in the ‘other FMCG’ segment, which accounts for about 11% of revenue.
• HUL & Marico: Likely to see incremental benefit from lower tax on household and personal care categories.
• Britannia: Benefits in dairy and wafers, though contribution is under 5% of overall revenue.
• Colgate Palmolive & Dabur: Relief from rate cuts in oral care and Ayurvedic healthcare products like Chyawanprash (23% of Dabur’s India revenue).
• Nestlé India: Nearly 30% of its portfolio—including packaged foods and beverages—moves to the lower slab.

Consumer Durables: Whirlpool, Amber, Dixon, PG Electroplast

The durables index saw a strong push as large appliances became more affordable.

• Whirlpool & Amber Enterprises: Positive traction expected as GST on cooling appliances eases from 28% to 18%.
• Dixon Technologies & PG Electroplast: Benefiting from electronics and home appliance categories under the revised 18% slab.
• Voltas & Havells: While not in the reference rally list, reduced taxation on white goods is set to improve channel liquidity.

Footwear: Bata, Relaxo, Khadim, Metro, Campus

The biggest cheer came from footwear stocks after GST was slashed on products priced below ₹2,500.

• Bata India: Stock gained momentum with stronger affordability in the mass segment.
• Relaxo Footwears: Direct beneficiary due to its large sub-₹1,500 portfolio.
• Campus Activewear: Nearly 22% of sales are from products below ₹1,050, providing strong tailwinds.
• Metro Brands: About 4–8% of sales from sub-₹500 to ₹1,500 categories qualify for lower GST.
• Khadim: Gains from higher competitive pricing versus unorganized players.

This rate cut also helps narrow the pricing gap with unorganized players, accelerating the shift toward branded and organized footwear.

Food & Beverage Specialists: Britannia, Nestlé, Tata Consumer

Packaged food names also saw gains as items like ghee, butter, cheese, paneer, bottled water, juices, noodles, and wafers shifted from 12% to 5%.

• Britannia, Nestlé, and Tata Consumer Products emerged as top beneficiaries, thanks to broad portfolio exposure.
• Smaller players like Bikaji Foods (80% revenue) and Gopal Snacks (85%) also rallied in early trade, benefiting from reduced tax on packaged snacks.

Retail & Discretionary Players: DMart, Vishal Mega Mart, Page Industries

Organized retail also joined the rally.

• DMart and Vishal Mega Mart gained as staples became cheaper, boosting customer footfalls.
• Page Industries, known for premium innerwear, saw momentum on expectations of stronger organized retail growth.

Summary of the Article

On September 4, the Indian stock market surged as GST rate cuts revitalized consumption-driven sectors.

• FMCG majors like ITC, HUL, Britannia, Colgate, Dabur, and Nestlé rose up to 5%.
• Consumer durables such as Whirlpool, Amber, Dixon Tech, and PG Electroplast saw gains in the range of 1–5%.
• Footwear companies including Bata, Relaxo, Khadim, Metro, and Campus rallied after footwear GST was slashed from 12% to 5%.
• Retailers like DMart, Vishal Mega Mart, and Page Industries also recorded strong buying interest.

The simplification of GST slabs into 5% and 18% has created a clear, consumption-friendly tax regime. With essential goods, home appliances, and footwear all becoming cheaper, investors cheered the move, powering the stock market to fresh gains.