5 Company And Stocks That Will Benefit from GST Implementation

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The eagerly awaited Goods and Services Tax (GST) is finally set to be implemented on July 1, 2017. Here are 5 stocks that could benefit largely from GST by way of lower taxes and higher volume growth. Apart from this certain sector would now benefit with the unorganised sector coming under the ambit of GST. Take a look.

Heritage Foods

Watch for the stock of Heritage Foods as this company is one of the beneficiaries of the GST. Heritage has business divisions that are into Dairy, Retail, Agri, Bakery, Renewable Energy and Vetca. Milk is exempted from GST and Heritage Foods is a big player in milk supply especially in South India. The stock of Heritage Foods maybe slightly expensive at the current levels of Rs 1,146, though watch for the stock as it is a big player in the milk business.

Check stock quote of Heritage here

Prabhat Dairy

This is another company that will gain from the GST implementation as the company is another big player in the milk business. In fact, Prabhat Dairy has two manufacturing facilities with an aggregate milk processing capacity of 1.5 million ltrs/day. The stock is also expensive (in terms of p/e) like Heritage Foods and is available at a price of Rs 121. However, going ahead we believe that with the expansion the company can report an EPS of Rs 4 by 2017-18, which should take the p/e to around 30 times. The stock is expensive at the current levels, though the company would benefit from GST implementation.

SpiceJet

If you are flying economy the GST will be at 5 per cent, which should benefit companies like SpiceJet. It is important to note that the stock has bee flying high already, saw you need to exercise some caution. Moreover, stock price movement of aviation companies largely depend on how prices of aviation turbine fuel move. So, if crude prices go higher, share prices of aviation companies like SpiceJet tend to fall.

Check stock quote of Spicejet

Relaxo Footwear

A large part of the footwear market sales comes from the unorganised sector. Some estimates place this number as high as 60 per cent. Bringing the unorganised sector under the ambit of GST would help reduce pricing pressures for Relaxo and benefit the company. So, you can see the stock, which could be increasingly volatile in the company days. The stock closed at Rs 460 on the NSE.

Check stock quote of Relaxo here

Dabur India

Most of Dabur's products fall under the lower GST rate of 18 per cent. This includes categories like soaps and hair oil. The company is likely to benefit also from pricing pressures that would come into the unorganised sector. The stock of Dabur last closed at Rs 275.

Check stock quote of Dabur India here

Disclaimer

This article is strictly for informational purposes only. It is not a solicitation to buy, sell in securities or other financial instruments. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and the author of this article do not accept culpability for losses and/or damages arising based on information in this article. 

Read more about: gst, dabur, prabhat
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