Morgan Stanley has said the GST Council’s recent decision to move to a two-tier tax structure will broadly benefit consumer companies, but the impact will be sharper for staples and organised players. The brokerage noted that staples are likely to see stronger growth momentum and a shift in market share toward larger, organised firms.
Among food companies, Morgan Stanley said Britannia Industries, Nestle India and Tata Consumer Products are better positioned than home and personal care (HPC) names to benefit from the reduction in GST on essential goods.
The brokerage also expects gains for retailers and discretionary plays such as DMart, Vishal Mega Mart and Page Industries, with the GST cut creating conditions for sustainable growth in consumption.
Since mid-August, staples have already begun to outperform the broader consumer basket, while discretionary stocks have lagged, Morgan Stanley pointed out, suggesting that investor positioning is shifting in anticipation of stronger volume-led growth.
Disclaimer: This article is based on brokerage views as cited. The views expressed are those of the brokerage and do not represent investment advice.
