Belrise Industries Expects Pre-Covid Level Demand Recovery After Roll Out Of Proposed GST Reforms
The GST Council, at its meeting scheduled on Sept. 3-4, is expected to decide on a reduction in tax rates on over 150 items belonging to various sectors.
Automotive component manufacturer Belrise Industries Ltd. expects strong demand recovery following the implementation of the proposed GST reforms, particularly in the automotive sector, the company’s Promoter Sumedh Badve said on Tuesday. He highlighted that lower prices will benefit Original Equipment Manufacturers (OEMs) and customers.
“So, it is obvious the benefit would be in terms of rate reduction, very lucrative to the customers, the OEMs…..the overall price obviously goes down, which is a very positive demand booster and it's great for automotive. It’s a meaningful reduction that will drive growth. The two-wheeler industry peaked pre-COVID but hasn’t reached that level since then. This could be a great turning point,” Badve noted.
The GST Council, at its meeting scheduled on Sept. 3-4, is expected to decide on a reduction in tax rates on over 150 items belonging to various sectors. This aims to reduce household tax burdens and boost consumption by moving many goods from 12% and 18% slabs to 5% or even zero GST.
Badve said that the GST changes would drive volume growth, but margins have remained stable. There hasn’t been much change in their margin profile so far.
“So, this will drive volume, it'll drive better demand with respect to margin….If you compare to the previous period, we're largely in sync…..there has not been much change in our margins,” he said.
When asked about recent developments, including Trump tariffs, Badve allayed concerns as Belrise Industries has limited exposure to the United States.
“We do export to Europe to certain premium four-wheeler manufacturers. That is actually looking positive ...the India-UK FTA is actually very positive in that sense. With respect to our end-to-end exports to the OEMs that we work with, we have exposure to South America, to Europe, Africa, Southeast Asia and the larger Asian countries. That demand continues to be robust. I think it was with respect to GST, it's very positive in terms of driving demand and growth. ….especially given the festive season that we're currently in,” he said.
On the recent potential renewal of the relationship between India and China, he noted that it could ease raw material issues for the auto component manufacturers.
“And number three, given the current positive talks that are currently happening between India and China, actually make things significantly easier and will drive EVs further. That is our take from what is as they are ongoing right now,” he added.
Shares of Belrise Industries were trading at Rs 136.75 apiece, down 0.62%, on the NSE at 2:12 p.m., compared to a 0.27% drop in the benchmark Nifty50 at 24,559.45.
