Tale of the Tape 

Howdy folks and welcome back to the market of stocks!

Markets were on FIRE today as investors cheered the GOI’s decision to cut GST rates on a wide range of goods. The Nifty (+1%) and Sensex (+0.8%) saw solid gains. The optimism spread to broader markets as well, with Midcaps (+1.1%) and Smallcaps (+1.4%) seeing strong buying. A cool 385 stocks in the NSE 500 ended in the green.

Most sectors ended higher as well. Real Estate (+2.2%) and Metals (+1.9%) led the rally. Meanwhile, IT stocks (-0.6%) witnessed some selling pressure.

In today’s issue of the Daily Rip, we look at which sectors will benefit the most from the GST bonanza, Vikram Solar’s upcoming IPO, trending charts and more.

Honourable mentions: 

Plastic pipe stocks saw a bump after the DGTR recommended an anti-dumping duty on PVC resin imports. Astral, Supreme Industries and Finolex rallied between +3% and +6%. Glenmark Pharma (-3.5%) was under pressure; Nomura sees a -25% downside from current levels.

Check out the NSE 500 heatmap:

Market
GST 2.0 Is Coming

Markets ZOOMED today after PM Modi announced that the GST system would be reformed aka chopped down by Diwali. This will be a HUGE boost for consumption and the Indian economy. So, here’s a quick rundown on what's at stake.

The fineprint: GST currently operates on a four-bracket system -- 5%, 12%, 18% and 28%. Reports say this could move to a two-rate structure of just 5% and 18%. Over 90% of products that were taxed at 28% will shift to 18%. Similarly, those that were taxed at 12% will move to 5%. Analysts say that if this happens, GST receipts could fall by ~9% with revenue foregone coming in at Rs 1.8 lakh cr per year. But this should be recouped over the next few years as GST compliance improves. PS - some luxury & sin products (online gaming, high end cars etc) could be clubbed under a new special rate of 40% 

Winners: The stocks that will benefit the most are companies that sell big-ticket goods and are currently taxed at 28%. These include car companies & bikes (Maruti Suzuki up +8%, HeroMotoCorp up +7%), AC companies (Voltas +8%), and even cement companies (UltraTech up +4%). Hotels are also another big beneficiary (Lemontree +6%).

At the lower end -- where goods are currently taxed at 12% and will be cut to 5% -- we should see both clothing retailers (Trent up +4%) and FMCG firms (Nestle India up +7%) seeing a big bump in demand.

There are no losers per se. But it looks like alcohol, tobacco, gaming and luxury cars will remain as heavily taxed as before. But let’s be real, there was no hope of this being reduced.

Zooming out: GST cuts are the BEST way to boost consumption. This is because income tax cuts usually translate into higher savings. But reducing taxes on everyday goods will actually make people want to buy more. This is a major step and just what our economy needs when it’s being hit by a slowdown + threat of Trump’s tariffs.

Specials
Ashish Kacholia Portfolio Changes

With ₹2,600+ Cr across more than 40 stocks, Ashish Kacholia’s portfolio is full of interesting picks. In our latest video, we dive into his top holdings, new stock picks, and major portfolio changes this quarter.