Stocks to Watch Today, September 4: Auto, FMCG, Cement, Dairy, Insurance, and More in Focus
The Indian equity market is set for a positive opening on Thursday, with GIFT Nifty futures indicating a 148-point rise in Nifty50. Investor sentiment is buoyed after the 56th GST Council meeting on Wednesday approved a sweeping overhaul of the tax structure, reducing slabs from four to two (5% and 18%), effective September 22. The changes are expected to significantly benefit consumer-facing sectors, autos, durables, and agriculture-linked companies.
Here are the top stocks and sectors to watch today.
Auto and Auto Ancillaries
Shares of automobile makers will be in focus after the GST Council slashed rates on small cars, entry-level bikes, and auto components.
- Petrol, LPG, and CNG vehicles of less than 1,200 cc (and not more than 4,000 mm in length), and diesel vehicles up to 1,500 cc, will now be taxed at 18% instead of 28%.
- Motorcycles up to 350 cc also move to the lower 18% slab.
- Auto components, previously taxed at 28%, will now attract 18% GST.
This restructuring is expected to benefit companies like Maruti Suzuki, M&M, Hero MotoCorp, and listed auto component makers. Shares of Maruti (+0.57%) and M&M (+1.59%) were already trending higher in the previous session.
FMCG and Consumption Plays
Consumption-driven stocks are expected to rally as common-use items like hair oil, corn flakes, personal care products, and household appliances move into lower tax brackets. Companies such as HUL, Nestle India, Dabur, and TCPL are in focus.
Britannia (+0.28%) gained marginally on Wednesday and could see more action as FMCG players stand to benefit directly from improved demand in the festive season.
Cement and Infra
Cement prices are set to ease as the GST rate is reduced from 28% to 18%. Analysts expect this to provide a boost to infrastructure activity, with Ambuja Cements (+1.15%) and other majors like Ultratech Cement and Shree Cement likely to trade higher.
Tobacco and Cigarette Makers
Tobacco firms, including ITC, Godfrey Phillips, and VST Industries, will be in focus. While the broader GST rationalization benefits most sectors, the Finance Minister clarified that tobacco, gutkha, and cigarettes will continue to attract the current 28% rate plus compensation cess until state revenue loans are fully repaid. A special 40% slab has also been proposed for high-end cars and tobacco products.
Dairy and Agri Stocks
Agriculture and dairy-related firms are likely to gain after the Council reduced GST on several key products.
- UHT milk and paneer will now be completely tax-free, down from 5%.
- Fertilisers, biopesticides, and agricultural equipment have also been moved to lower slabs.
Coromandel International (+2.13%), M&M, and Dodla Dairy are among the key beneficiaries expected to see volume action.
Air Conditioner Manufacturers
Air conditioner makers will cheer the rate cut, with GST reduced to 18% from 28%. Stocks such as Voltas (-0.71%), Blue Star, Havells (Lloyd), and component suppliers like Amber Enterprises and PG Electroplast will be in focus. The move comes as a relief after AC makers faced weak sales in Q1 FY25 due to unseasonal rains and a high base effect.
Insurance Companies
Insurance stocks such as LIC, HDFC Life, and ICICI Prudential Life are expected to rally after the Council exempted life and health insurance policies from GST. This includes all term, ULIP, and endowment life policies, along with family floater and senior citizen health insurance plans. Analysts see this as a direct positive for affordability and penetration.
Education and Stationery Firms
Education-related companies like DOMS Industries (+0.99%), Navneet Education, Linc Ltd, and Flair Writing will benefit as GST on school essentials such as pencils, sharpeners, crayons, notebooks, and maps has been completely removed. This move provides relief to students and parents while supporting stationery makers.
Power and Infra Equipment: BHEL
Bharat Heavy Electricals Ltd (BHEL) announced that it accepted a Letter of Intent from MB Power (Madhya Pradesh) Ltd for supplying boiler, turbine, and generator equipment for the 1×800 MW Anuppur Thermal Power Project. The deal is valued at approximately ₹2,600 crore (excluding GST). Shares of BHEL are likely to be in focus in today’s trade.
The sweeping GST rate cuts are set to act as a consumption booster, with auto, FMCG, ACs, dairy, insurance, and stationery companies at the forefront. Cement and infra players are also expected to see momentum, while tobacco remains under higher tax. With festive demand around the corner and market sentiment improving, Thursday’s session could see broad-based participation across consumption and infra-linked themes.
