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📌 GST Reforms 2025: Portfolio Adjustments

Created by Piyush Patel_ in Economic Update Visit: 138 14 Sep 2025

📌 GST Reforms 2025: Portfolio Adjustments

India’s latest GST reforms (September 2025) bring a sweeping set of changes — rate cuts in consumption-oriented sectors, reductions for infra materials and healthcare, while raising taxes on coal and sugary beverages. These changes directly impact several industries and, therefore, our Future Bharat Portfolio positioning.

🔹 Key GST Changes

Category	Old Rate	New Rate	Impact
Food & Personal Care (FMCG)	12–18%	5%	Boost to demand volumes, improved affordability
Air Conditioners, TVs, Small Cars, 2W, Tractors	28%	18%	Strong boost to discretionary consumption
Cement	28%	18%	Positive for infra & housing demand
Healthcare (Drugs & Kits)	12–18%	5% / Nil	Affordability improves, volume growth
Coal/Lignite/Peat	5%	18%	Negative for coal-based power/fuel users
Sugary/Carbonated Beverages	28%	40%	Negative for beverage players

🔹 Direct Beneficiaries – Our Adjustments

1. FMCG (Tata Consumer, Nestlé, Patanjali)

Lower GST on staples/personal care → demand uplift.
Action: +1% portfolio tilt across FMCG basket.

2. Consumer Durables (Voltas, Havells, Dixon)

ACs, TVs move to 18% GST → affordability improves.
Action: +0.5% tilt.

3. Autos (Maruti, Bajaj Auto, Balkrishna)

Lower GST for small cars/2W/tractor ecosystem.
Action: +0.3% tilt.

4. Industrials & Materials (L&T, BEL, Ultratech, Kajaria)

Cement GST cut → direct cost savings.
Action: +1% tilt (esp. Ultratech & Kajaria).

5. Healthcare (Apollo, Divis, Lal Path)

Lower drug/test kits GST → better affordability.
Action: +0.5% tilt.

6. Utilities & Energy (Tata Power, Power Grid)

Coal GST hike = negative for thermal exposure.
Action: Neutral to slight trim in coal-heavy power; shift focus to renewables and grid infra.

7. Beverages

GST hike to 40% → consumption risk.
Action: Avoid new allocation.

🔹 Indirect Beneficiaries – Second Order Effects

Sector	Companies	Logic	Suggested Tilt
Consumer Finance	Bajaj Finance	More EMI financing demand from durables & autos	+0.2–0.3%
Banks	HDFC Bank, AUBank, SBI	Higher credit demand indirectly	Hold
Insurance	HDFCLIFE, ICICIGI	More auto insurance, rising disposable income	Hold / +0.1%
AMCs	HDFCAMC	Higher SIP inflows over time due to savings shift	Hold

🔹 Portfolio Adjustments Snapshot

Sector	Old Weight	New Suggested Weight	Change
FMCG	8%	9%	+1%
Consumer Durables	2.5%	3.0%	+0.5%
Autos	2.2%	2.5%	+0.3%
Industrials & Materials	12%	13%	+1%
Healthcare	8%	8.5%	+0.5%
Consumer Finance	4.1%	4.3%	+0.2%
Utilities	6%	5.5%	–0.5%
Energy (Coal-heavy)	2%	1.5%	–0.5%

(Other sectors unchanged; overall portfolio normalized back to 100%.)

🔹 Investor Takeaways

Direct Winners: FMCG, Durables, Autos, Cement, Healthcare – clear near-term beneficiaries.
Indirect Winners: Consumer finance, banks, insurance, AMCs – benefit gradually via higher disposable incomes.
Losers: Coal-heavy utilities, sugary beverages – maintain caution.

Strategy Going Forward

Use GST reforms as a tactical overlay for 2–4 quarters.
Let valuation-driven tactical weights remain the core driver.
Maintain long-term focus on growth + quality + consistency to ensure wealth compounding.