Shares of Dabur India Limited rose 2.54% to ₹536.95 on Tuesday, September 2, as investors turned optimistic ahead of the 56th GST Council meeting scheduled for September 3–4 in New Delhi. The stock gained on expectations of tax rate cuts across consumer categories that could directly benefit FMCG companies.
Global brokerage Goldman Sachs said the GST Council is expected to push for a simplified two-rate GST structure of 5% and 18%, phasing out the existing 12% and 28% slabs. If approved, this would make several daily-use items significantly cheaper and provide a strong boost to FMCG and footwear sectors.
For Dabur, the key takeaway lies in categories like instant noodles, juices and Ayurvedic products, which currently attract a 12% GST. If moved down to 5%, it will directly enhance consumer affordability and lift volumes for companies like Nestlé, Emami, and Dabur.
The brokerage also outlined additional scenarios:
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If all packaged food products shift to 5%, companies like Britannia, Varun Beverages and Tata Consumers will see large gains along with Dabur.
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If mass consumption FMCG products such as soaps, detergents, shampoos, and toothpaste move from 18% to 5%, the beneficiaries would include HUL, Britannia, GCPL, Marico, Nestlé, Varun Beverages, Tata Consumers, Emami, and Dabur.
The possible GST cut has triggered buying interest in FMCG stocks, putting Dabur in sharp focus as a key gainer in any of the three outlined scenarios.