Stock Market Highlights 4th September 2025: Markets end higher for second day as GST cuts cheer investors

UBS on GST Reforms

Cement

Sentimentally positive, though demand should remain inelastic in near term

Govt to work towards rate cut benefits being passed on to consumers

Though this should make near-term environment conducive to price hikes

Consumer Durables

Positive for Voltas and Havells

Boosts affordability, supports festive demand, and helps clear channel inventory

Higher disposable cash with end consumer from GST cut, income tax cut earlier, and easing inflation should boost white goods demand

FMCG

Should boost consumer sentiment

For companies it depends on extent of input tax credit which will be foregone

This is largely Neutral to positive for most of our consumer companies

Bernstein’s India Strategy

Given inventory in the system and the effective implementation from September 22, there could be some near-term adjustments as companies manage existing stocks

Categories with higher penetration such as entry level motorcycles may see a relatively muted demand response

In contrast, discretionary products like air conditioners could see more notable volume growth

Remain underweight on government capex and Industrials, as policy attention shifts further toward consumption themes

The absence of negative surprises in the announcement reaffirms that policymakers are maintaining a clear focus on reviving consumption

Bernstein on GST Reforms (Fiscal Impact)

Sheer scale decisively ends any uncertainty around the government’s stance on boosting consumption

This reform sweeps aside the skepticism about the intent and political will behind the consumer push

Net impact on the central government’s fiscal deficit, assuming no capex adjustments, would be close to 20 basis points

If capex is reduced by 5%, the impact moderates to about 5 basis points

If the Centre absorbs the full revenue loss without any capex cuts, the headline impact on the fiscal deficit could widen to around 40 basis points

CLSA India Strategy (GST Rationalisation)

GST cut after income tax and interest rate cuts will boost consumption

Manageable fiscal impact but a consumption boost equal to 30bps of GDP

Gainers across autos, FMCG, durables, cement and insurance

Third significant consumption boost and gives impetus to our call for consumption stocks over capex plays

Lower indirect taxes will lower working capital needs and raise ROEs for SMEs in the trade chain, boosting consumer confidence

Key direct gainers from these tax cuts are autos, FMCG, durables, cement, insurance, quick service retailers (QSR) and alcohol players

CLSA On Consumer (GST Cut)

GST Council Approved Two-tier Structure: 5% & 18%, Effective September 22

FMCG Products Like Toothpaste, Soap & Food Items Moved To 5% From 12-18%

Estimate 6-11% Reduction In Consumer Prices

Positive For FMCG Demand, Food & HPC Products Benefit Most

Top Beneficiaries: Britannia & Colgate With Near-complete Portfolio Coverage

QSR & Alcoholic Beverages Also Gain From Input Tax Reductions, As They Don’t Receive Input Credit

Goldman Sachs On FMCG (GST)

Overall boost to consumption growth as consumer wallet gains

Shift from unbranded to branded products

Volume growth acceleration from price elasticity of demand

See Potential for margin expansion

ITC – we await clarity on cigarette compensation cess

Britannia / Colgate / Dabur / Nestle / GCPL / HUL / Marico key beneficiaries

Jefferies on Consumer Sector

Almost all staple firms will see rate reduction

Tobacco taxes move down meaningfully, although there is ambiguity on timeline and uncertainty on final outcome

Tweak in GST rates to help apparel & footwear

Levy of GST on delivery charge (food/QC) is a slight negative for platforms

Levy of GST at 18% on local delivery services would be a slight negative for Eternal and Swiggy

Expect companies to pass on the impact (+/-) to the consumers

UBS on Life Insurance

No input tax credit offset limits full pass on of the benefit

Full pass on of reduced GST will be negative for insurers

One-time EV hit on back book policies expected

Full impact uncertain at this point

Positive for demand

Citi on GST Reforms

Govt estimates ₹48,000 cr net revenue foregone based on FY24 data

Extrapolated to FY26, estimated ₹57,600 cr loss (~0.16% of GDP)

Treatment of compensation cess revenue loss remains unclear

GST cuts affect items comprising 16% of CPI basket, could lower inflation by 1.1 percentage points assuming full pass-through

Actual impact may be lower due to partial passthrough and input tax credits

CII on GST Reforms

Refund simplification & MSME procedure easing called pathbreaking

Life & health insurance premiums exempted from GST

Clarity to ease compliance & reduce litigation

Reforms bring greater predictability for businesses & consumers

Lower rates on daily items & critical inputs provide family relief

Reforms strengthen foundation for growth

Industry to swiftly pass benefits to consumers

CII commits to partnering with Govt for smooth rollout, demand & jobs

Nuvama on Neuland

Initiates coverage with Buy, TP ₹17,700

Peptides to drive growth post-FY28E

Unit III expansion key lever till FY28E

Revenue to grow 1.8x FY25-28E; CMS share ~64%

Pipeline, peptide facility support growth beyond FY28E

Growth pick-up expected from H2FY26E

FY25-28E CAGR: Revenue 21%, EBITDA 37%, PAT 45%

Valuations at 39x/33x FY27E/FY28E EPS

Nuvama on Venus Pipes

Maintain ‘BUY’ with a TP of INR2,260

i) Volume guidance upgraded to 25% (earlier: 20%).

ii) Targeting new seamless plant’s utilisation to touch 80–90% and that of welded pipes of 70–80%.

iii) Overall capacity utilisation expected to touch 80% on capacity of 42,000MT.

iv) Order book stands strong at INR5.6bn with 60% inclined toward seamless pipes.

v) Strong demand expected from power for three–five years.

vi) Seamless pipes and fittings’ capacities to be operational in H2FY26E.

MOSL on L&T Finance

Maintains Buy with a target price of ₹260

The company is balancing growth and asset quality amid macro headwinds

Benefits of the Cyclops platform will be more visible from 2HFY26

L&T Finance swiftly completed the integration of Paul Merchants Finance’s gold loan business within two months

The gold loan book stands at ~1,300 crore; the company targets 300+ gold loan branches by FY26, largely through its new ‘Sampoorna’ multi-product branches

Loans are estimated to grow at a CAGR of ~22% and PAT at ~25% over FY25-FY27

Consolidated RoA/RoE are projected at 2.7%/~14% by FY27E

L&T Finance is expected to emerge from the MFI credit cycle and continue to deliver improved profitability and RoA expansion

Axis Cap on IndiGo

Maintain Add; Hike TP to Rs 6450 from Rs 6350

IndiGo continues to maintain its lead; performance better than peers

Yields across key routes have been holding up well over the past few months

Decline in ATF spreads will also partially negate the adverse impact of INR depreciation

Look to ADD the stock on dips, as yields may surprise positively

Raise FY26-28 EBITDAR by ~4% on better-than-expected yields