A 'Definite Consumption Boost' In 2HFY26: Market Veteran Bets On THESE Sectors Amid GST Reforms

The sweeping reform of India's Goods and Services Tax (GST) structure is likely to drive the consumption growth across key sectors from the second half of the current fiscal, according to D-Street analysts and economists.

PM Modi on Independence Day 2025, announced the next-generation GST reforms, dubbed GST 2.0, expected by Diwali, to rationalize the existing tax rates. As per the Centre’s proposal, the existing 12% and 28% GST slabs will be scrapped entirely, while retaining the 5% and 18% tax slabs.

The potential GST rate cuts improved the market sentiment this week. The NSE Nifty 50 benchmark reclaimed the 25,000-mark after a gap of 24 days. Brokerages have pegged the GST reforms as an impetus to drive growth and revenue for consumer-driven companies in the next few months.

In the current scenario, Milind Karmarkar, Director and Fund Manager, Dalal & Broacha, PMS told NDTV Profit in an exclusive interview that the GST reforms will provide a 'definite boost' to India's consumption in the second half of the fiscal. The market veteran has picked sectoral bets in the festive season to make the most of consumption uptick from GST 2.0.

Karmarkar told NDTV Profit that the Indian economy will be driven by consumption in the near-term, adding that nearly 65% of their portfolio is consumption-driven, predominantly with companies in sectors such as pharma, finance, hospitals, retail. "We have invested 65% in these stocks," he said.

The market veteran said that he has almost nil exposure to export-driven cos, and 'not much' exposure to tech companies as well. "The market reacts very sharply on positive announcements. The consumption pack went higher 2-3% after the GST reform decision," he noted.

Explaining the consumption uptick, Karmarkar said that during Budget 2025, the tax slabs went up which means taxpayers will have more savings. "This will bring a significant impact on consumption starting from the second half," he claimed.

In the first two quarters, people would have paid less advance tax or their TDS wud have been lower. So they would have some additional kitty at their disposal. This will help them in buying what they want to," he added.

According to the expert, a normal person (retail investor) will postpone his buying in the shorter term. "Aug and Sept may not be that great, but after that we'll see a growth in consumption," he told NDTV Profit.

The market expert bets on auto, apparel, and white goods and believes the sectors 'should do well' after the GST reforms. He has also invested in smart meters, HVDCs, and transformer companies. Karmarkar agreed that currently there is a slowdown in consumption, and people are not buying due to a 'psychological factor'.

"When a tax cut is announced, no money comes in the hands of the consumer in the first quarter as TDS is there only there for 2-3 months. After, six months they get a reduction in TDS for almost six months," he noted. He concluded that 2HFY26 will be 'better' in terms of consumption.