Stocks to Watch, September 4: Auto and auto ancillaries, FMCG, AC stocks, cement, tobacco, DOMS Industries, Dodla Dairy, insurance stocks

The GST Council approved an overhaul of rates by limiting slabs to 5% and 18%, effective from September 22, the first day of Navaratri.

Almost all personal use items will see rate cuts as the government looks to boost domestic spending and cushion the economic blow of the US tariffs.

Lower cement stocks will boost the infra sector.

The FM informed the media that the panel approved simplifying the goods and services tax (GST) from the current four slabs -- 5, 12, 18 and 28% -- to a two-rate structure -- 5 and 18%.

A special 40% slab is also proposed for a select few items such as high-end cars, tobacco and cigarettes.

However, the FM stated that tobacco, gutkha, tobacco products and cigarettes will continue to be charged at the current 28% plus a compensation cess till such time that loans taken to pay states for revenue loss are fully paid back.

The 56th meeting of the GST Council, chaired by Union Finance Minister Nirmala Sitharaman, approved significant rate cuts for the agriculture and dairy sectors.

The GST Council approved limiting slabs to 5% and 18%, effective from September 22, the first day of Navaratri.

Petrol, LPG and CNG vehicles of less than 1,200 cc and not more than 4,000 mm in length and diesel vehicles of up to 1,500 cc and 4,000 mm in length would move to the 18 per cent rate from the current 28 per cent.

Motorcycles up to 350 cc would be taxed at a lower GST of 18% against 28% currently.

Presently, automobiles are taxed at 28%, which is the highest GST slab.

A compensation cess, ranging from 1 to 22%, is levied on top of this rate, depending on the type of vehicle.

The total tax incidence on cars, depending on engine capacity and length, ranges from 29% for small petrol cars to 50% for SUVs.

Besides, GST on auto components has been reduced to 18% from the current 28%.

Other stocks such as Amber Enterprises, PG Electroplast, Virtuoso Optoelectronics, Symphony, E-Pack Durable and Johnson Controls will also be in the spotlight.

The GST rate cut comes as a great relief for AC companies, which saw their businesses impacted due to unseasonal rains and early monsoon.

Besides rain, the impact was furthermore noticeable due to an exceptionally high base in the first quarter of the financial year 2024-25, when a harsh and prolonged summer benefited makers due to record sales.

Announcing the outcome of the 56th GST Council meeting, Finance Minister Nirmala Sitharaman on Wednesday said that all individual life insurance policies, whether term life, ULIP or endowment policies, and subsequent reinsurance are exempt from GST.

All individual health insurance policies, including family floater policies and policies for senior citizens and reinsurance thereof, will also be exempt from GST, she said.

The Letter of Intent (LOI) was accepted for the supply of equipment, including a boiler, turbine, and generator. A formal contract agreement is expected soon, BHEL said in a regulatory filing.

The total project, based on supercritical technology, is worth approximately ₹2,600 crore excluding GST.