Shares of Heritage Foods Ltd surged 3.94% to ₹510 on Thursday, September 4, after the GST Council announced steep tax reductions on dairy and milk products under its new reform structure.
GST relief for dairy products
The revised GST rates, effective September 22, are set to benefit the organized dairy sector significantly. Key changes include:
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UHT milk: reduced from 5% to 0%
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Butter, ghee, cheese: cut from 12% to 5%
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Paneer: brought down from 5% to 0%
This move is expected to make packaged dairy products more affordable, boosting demand across India and giving a direct push to branded players.
Heritage Foods among key beneficiaries
As one of India’s prominent dairy firms, Heritage Foods is poised to benefit from lower tax incidence, potentially improving sales volumes and consumer reach. The announcement also sparked optimism across other dairy counters such as Hatsun Agro, Parag Milk, Dodla Dairy, Umang Dairies, and Nestle India (value-added dairy portfolio). FMCG majors like Britannia and ITC are also seen as indirect beneficiaries.
Market outlook
Brokerage houses believe the GST cuts are a strong positive catalyst for the dairy industry, aiding profitability and consumption growth. Investors now await Q2 results to see the real impact of the new tax regime on revenue momentum.
