Tale of the Tape 

Good evening everyone!

Nifty (+0.8%) and Sensex (+0.7%) gained for a third straight session led by heavyweight buying. Midcaps (+0.9%) and Smallcaps (+0.8%) were in the green too. 377 stocks in the NSE 500 ended higher! Check out the Stocktwits Sentiment Meter:

Except FMCG (-0.4%), all other sectors ended in the green. PSU Banks (+2.6%), Metals (+1.2%) and Oil & Gas (+1.2%) were the top winners.

GST hikes may be on the horizon. Read our top story for how this will hurt sectors and maybe even India’s growth story in the short-term.

Nuvama sees a whopping +52% upside in this Adani Group stock. More details below.

Swiggy, KPI Green Energy and Indegene saw big moves today. Check out their charts below to find out why.

HEG (+14%) and Graphite India (+9%) zoomed after China imposed curbs on graphite product exports to the US.

DLF and Prestige Estates were in focus after UBS slapped a buy call on the stocks; the brokerage sees an 18% & 26% upside respectively.

Zen Technologies (-5%) fell after 20 lakh shares (2.5% equity) changed hands in a block deal; the buyers and sellers are not known.

Niva Bupa (+11%) and Star Health (+4%) were up over reports of GST being cut on health insurance premiums.

Granules India (-10%) was the top NSE 500 loser after the USFDA red-flagged its Hyderabad facility.

MapMyIndia cracked another -9% today despite management clarification over its CEO’s new B2C biz.

Here are the closing prints:

Economy
Say No To More Taxes

ITC, Varun Beverages and a host of consumer companies were volatile AF on reports that GOI may increase GST on a whopping 148 items! ICYMI - The GST council has proposed creating a new tax slab of 35% that would be levied on luxury products. 

There’s a lot to unpack here. Most importantly, we need to remember this is a panel suggestion. Ultimately, the GST Council as a whole has to accept the proposal. The council only takes unanimous decisions, so we have no idea if this will actually happen. Wait until late December for the next council meeting to get a clearer picture. 

Secondly, wait for the fineprint! Cigarettes currently attract 28% GST but also are hit with an extra compensation cess of 5%-36% depending on their length. If tobacco products are put under the 35% tax slab will it be over and above the existing cess? Nobody has any clue. FYI - Macquarie notes that in the worst case, firms like ITC will only need to take a single-digit price hike to offset the tax burden. That said, there’s no doubt that other proposed taxes on readymade garments and luxury shoes & watches will hurt consumer firms. 

Big Picture: It is insane that any government wants to RAISE taxes at a time when urban consumption is slowing down and GDP growth is at multi-year lows. IF these changes happen, they may be packaged along with rate cuts for things like bottled water or bicycles. But even a ‘revenue neutral’ decision would still suck. Private consumption as a % of GDP has dropped from 58% in FY22 to ~55% in FY24. We’ve also seen higher taxes like LTCG. Almost every expert agrees the middle class needs some relief. It’s time both states and Centre get their shit together.

Stocktwits Specials
Stocks To Buy In This Fall

Markets have seen a healthy correction from their all-time highs. Experts say this may be one of the best times to build your portfolio. Here are 5 midcap & smallcap stocks that you must absolutely not miss according to market experts.