Shares of Parag Milk Foods climbed 4.48% to Rs 256 on Wednesday, September 4, after Finance Minister Nirmala Sitharaman announced sweeping GST rate cuts that directly benefit the dairy sector. The stock gained Rs 10.98 from its previous close of Rs 245.02, touching the day’s high of Rs 256, while the company’s market capitalization stood at Rs 28,130 crore.
Impact of GST rate cuts on dairy and milk products
The revised GST structure slashed rates on several dairy and milk products, creating a positive outlook for companies like Parag Milk. UHT milk has been moved from 5% to nil tax, paneer from 5% to nil, while butter, ghee and cheese have seen cuts from 12% to 5%. This rationalisation is expected to improve affordability and potentially boost demand for packaged dairy items.
Sector-wide beneficiaries
Alongside Parag Milk, other listed dairy players including Hatsun Agro, Heritage Foods, Dodla Dairy and Umang Dairies are seen as key beneficiaries. FMCG majors like Britannia (cheese and butter) and ITC (dairy beverages) also stand to gain, while Amul’s supply chain could see an indirect boost via GCMMF.
Updated stock details
Parag Milk traded in the range of Rs 256 to Rs 256 during the session. The stock has a one-year range between Rs 135.49 and Rs 261.20, with an average trading volume of 626.76K shares. Its price-to-earnings ratio stands at 26.89.
