Which sectors benefit the most from the GST rate cuts?

Autos (two-wheelers and tractors), auto parts, cement, consumer durables, pharma, apparel and footwear retail, and hotels are primary beneficiaries based on tax reductions from 28% to 18% and from 12% to 5% in relevant categories.

Should I buy immediately after a GST announcement?

Consider valuations, company fundamentals, and demand visibility first. Use staggered entries and consult an advisor before investing.

Are financial stocks affected by GST cuts?

Banks and insurers may not see direct GST changes but remain structural compounders; they can still be part of a diversified portfolio.

Top Stocks to Buy After GST Rate Cut in India – Auto, Cement, Retail & More

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Stock
August 20, 2025

GST Rate Cut: Best Stocks to Buy in 2025

The Indian stock market is buzzing after the government reduced GST (Goods and Services Tax) rates across multiple sectors. Lower tax rates mean cheaper products, higher demand, and better margins – making several companies attractive investment opportunities.

Let’s look at the sectors and stocks that may benefit the most.

Auto Sector – Strong Revival Expected

The biggest winner of the GST cut is the auto industry, especially two-wheelers and tractors.

Two-Wheelers (below 125cc) → Hero MotoCorp, TVS Motors, Bajaj Auto
Premium Cars (below ₹10 lakh) → Maruti Suzuki
Tractors → M&M, Escorts

GST reduced from 28% → 18%
Broker View: SBI Securities expects a demand surge, especially in rural markets.

Auto Parts – Cheaper Components

Companies: Motherson Sumi, Endurance, Exide, Amara Raja, Bharat Forge, Gabriel India, Sundaram Fasteners
GST reduced 28% → 18%
Spare parts becoming cheaper will drive both OEM and aftermarket demand.

Cement Sector – Boost for Housing & Infra

Companies: UltraTech Cement, Ambuja, Dalmia Bharat, Shree Cement, ACC, India Cements
GST cut 28% → 18%
ICICI Direct highlights strong growth potential as construction costs reduce.

Consumer Durables – Festive Demand to Rise

Companies: Voltas, Havells
GST reduced 28% → 18%
Motilal Oswal expects strong sales in air conditioners, refrigerators, and home appliances.

Pharma – Essential Medicines Cheaper

Companies: Sun Pharma, Dr. Reddy’s, Cipla, Aurobindo Pharma
GST cut 18% → 5%
This makes medicines more affordable, increasing domestic demand.

Retail Sector – Apparel & Footwear

Apparel → Page Industries, Bata India, Trent, V-Mart (GST 12% → 5%)
Footwear → Bata, Relaxo, Khadim India, Liberty Shoes (GST 12% → 5%)

📈 Centrum Broking expects strong demand recovery, especially in Tier-2 and Tier-3 cities.

Hotel Sector – Travel & Tourism to Gain

Companies: Indian Hotels, EIH, Lemon Tree, Chalet Hotels
GST reduced 12% → 5%
Hospitality is set for a strong revival with more affordable stays for travelers.

Financials – Structural Winners (No GST Cut)

Even though GST rates haven’t changed, financials remain strong long-term picks.

Banks: SBI, HDFC
NBFCs: Bajaj Finance, L&T Finance, Shriram Transport
Insurance: HDFC Life, SBI Life, ICICI Lombard

ICICI Direct recommends them as consistent wealth creators.

Conclusion – Which Stocks Should You Buy?

The GST rate cut is a game-changer for multiple industries. Investors should focus on:
Auto & Auto Parts – demand revival play
Cement & Consumer Durables – housing & consumption boost
Pharma – essential and defensive bet
Retail & Hotels – strong comeback story

For long-term portfolios, these sectors offer attractive entry opportunities. However, always do your own research or consult a financial advisor before investing.

Pro Tip: Keep an eye on festive season demand – it will be the first real test of how strongly GST cuts impact consumer spending.

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