Shares of consumption related companies including Hindustan Unilever (HUL), Nestle India, Bata India, Avenue Supermarts (D-Mart), Asian Paints, Berger Paints, Colgate-Palmolive India and GlaxoSmithKline Consumer Healthcare hit their respective all-time highs on Friday after the government announced a fiscal measures to revive the animal spirits in the Indian economy.
Among the individual stocks, HUL, GSK Consumer, Asian Paints, Bata India and Nestle India have rallied 6 per cent each, while Avenue Supermarts, Berger Paints and Colgate-Palmolive India were up 5 per cent each on the BSE.
In a major move, Finance Minister, Nirmala Sitharaman made several announcements for the corporate sector. Notably, the minister announced sharp cuts in corporation tax from over 25 per cent to 22 per cent among a series of announcements. Sitharaman said the total revenue forgone on account of today's measures would be Rs 1.45 trillion per year. CLICK HERE TO READ FULL DETAILS
Among the sectors, Rajiv Singh, CEO of Karvy Stock Broking expects banking, fast moving consumer goods (FMCG), consumer durables, and auto companies to be the major beneficiaries.
"The manufacturing sector will become attractive with a 15 per cent corporate tax rate for new manufacturing companies in India, especially in the times when the World is in the phase of trade wars", he added.
“By slashing corporate tax rate to 25 per cent from 35 per cent (22 per cent from 30 per cent without exemptions) for existing domestic companies and an extremely attractive rate of 15 per cent for new companies setting up manufacturing operations after 1st October 2019 and commencing operations before 2023, the government has rolled out a red carpet that would ensure hundreds of billions of dollars of FDI and FII flows over the medium term,” Ajay Bodke, CEO PMS of Prabhudas Lilladher said.