The GST Council's recent decision to slash rates across various sectors, effective September 22, 2025, has ignited positive sentiment in the Indian stock market, dubbed as "GST 2.0". The rate cuts, impacting industries from automobiles to fast-moving consumer goods (FMCG), cement, insurance, and consumer durables, are expected to boost consumption, improve corporate earnings, and drive GDP growth. Several analysts have identified over 90 stocks that could potentially benefit from this new market dynamic.

Automotive Sector

The automotive industry is poised to be a major beneficiary, particularly manufacturers of two-wheelers (below 350cc) and small cars, as the GST rate has been reduced from 28% to 18%. This reduction is expected to make these vehicles more affordable, driving sales and increasing demand.

Key stocks to watch include:

1. Hero MotoCorp: A leading two-wheeler manufacturer that will likely see increased demand due to lower prices.
2. Bajaj Auto: Another major player in the two-wheeler segment expected to benefit from the GST reduction.
3. Maruti Suzuki: With a significant share of the small car market, Maruti Suzuki stands to gain from the reduced GST on these vehicles.
4. Mahindra & Mahindra (M&M): M&M is expected to be one of the biggest beneficiaries, particularly with the surprise tax cuts on SUVs. Emkay Global estimates a significant positive impact due to the GST rate cut across its portfolio.
5. Eicher Motors: A significant portion of Eicher's portfolio is expected to benefit from the tax cuts.

Additionally, auto component manufacturers like Endurance Tech, Uno Minda, and Sona BLW are also expected to see positive impacts from the reduction of GST on auto components to 18%.

FMCG Sector

The FMCG sector will also likely experience a surge in demand due to reduced GST rates on various products. Branded namkeens, bhujia, instant noodles, fruit juices, and ayurvedic products see a GST reduction from 12% to 5%. Packaged water, chocolates, biscuits, instant coffee, hair oils, shampoos, oral care, and soaps now attract only 5% GST, down from 18%.

Stocks to consider include:

1. ITC: With a diversified portfolio including packaged foods and personal care products, ITC is well-positioned to capitalize on the lower GST rates.
2. Britannia: A major player in the biscuits and bakery segment, Britannia will benefit from the significant GST reduction on its products. Approximately 85% of Britannia's portfolio is expected to move to the 5% GST rate.
3. Hindustan Unilever (HUL): A large portion of HUL's portfolio, including soaps, shampoos, and oral care products, will now be taxed at the 5% rate, boosting demand.
4. Nestle: With a substantial portion of its business in confectionery and instant coffee, Nestle is also expected to see increased sales. Around 70% of Nestle's business is expected to move to the 5% rate.
5. Emami: With a presence in personal and healthcare products, Emami is also expected to gain.

Consumer Durables Sector

The GST rate cut on air conditioners (ACs) and televisions (TVs) from 28% to 18% is expected to spur demand in the consumer durables sector.

Stocks that may benefit are:

1. Blue Star: A leading player in the AC market, Blue Star is likely to see increased sales due to the reduced prices of its products.
2. Voltas: Another major player in the AC and consumer durables market, Voltas is also expected to benefit from the GST rate cut.

Insurance Sector

The abolishment of GST on individual life and health insurance policies is a significant positive for the insurance sector. Companies like LIC, SBI Life Insurance, and ICICI Prudential Life Insurance could see increased demand for their policies.

Economic Impact

Economists anticipate that these GST rate reductions will have a positive impact on the Indian economy, potentially adding 100-120 basis points to GDP growth over the next six quarters. This could also kickstart positive trends for Indian equities. The overall expectation is that lower prices will lead to increased consumption, boosting sales and profitability for companies across various sectors.