GST 2.0 Boost: ASK Hedge Solutions Positive On Consumer-Driven Sectors—Here's Why

ASK Hedge Solution is positive on food delivery, logistics, and distribution spaces amid the increasing positive sentiment for consumption sector, according to CEO Vaibhav Sanghavi. "For the next 12–24 months, the consumption segment is appearing to be a good space. In FMCG, there'll be volume growth rather than price decrease," he said.

Sanghavi's views came as market participants await the clarity over GST reforms implementation. The two-day GST Council meeting started from Sept 3, in which the recently announced rate rationalisation will be taken up for implementation. GST reforms are expected to boost consumption.

"Post last general election, the government has taken the concerted attempt to revive consumption, Sanghavi said, adding, "GST reform is an incremental step toward a common goal of inducing consumption. It is not an isolated measure. In last few years, welfare schemes, income tax benefits, and the Reserve Bank of India reducing rates and liquidity measures have been taken in run up to this."

According to Sanghvi, when consumption starts to do well, GDP growth will get slightly better. Business model-wise, companies in quick-commerce and food delivery segments are grabbing market share in traditional spaces. "They are turning profitable based on technological advances. Technology is the enabler of a strong market capture," he said.

ASK Hedge Solutions has a neutral position as opposite forces are at play in the markets. "FPI-driven pockets will likely remain under pressure for sometime. On the other hand, consumption-driven sectors are set to gain, he concluded.