HUL, Nestle: FMCG stocks rise up to 7% on GST reforms; analysts weigh

Nifty FMCG rose 2.66 per cent in early deals after the Goods and Services Tax (GST) Council, chaired by Finance Minister Nirmala Sitharaman on Wednesday, simplified the GST structure

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Fast-moving consumer goods (FMCG) stocks rallied up to 7 per cent, and Nifty FMCG rose 2.66 per cent in early deals. At 9:21 AM, 12 out of 15 constituents on the Nifty FMCG index advanced with Britannia up 6 per cent, Dabur 5 per cent, Colgate Palmolive 3 per cent, Nestle, Emami, and Hindustan Unilever (HUL) up over 2 per cent. In comparison, Nifty50 was up 0.8 per cent at 24,914.25. 

 

The rally came after the Goods and Services Tax (GST) Council, chaired by Finance Minister Nirmala Sitharaman on Wednesday, simplified the GST structure by removing the 12 per cent and 28 per cent slabs. 

 

As part of the rate rationalisation for the common man, GST on household articles such as soap, toothpaste, namkeen, chocolates, and coffee will now fall to 5 per cent from either 12 per cent or 18 per cent.

 

Items such as ultra-high temperature milk, paneer, and all Indian breads (roti and pcolaratha) will attract nil GST, down from 5 per cent. 

 

Sitharaman said the reform was not only about rationalising rates. “It’s also on structural reforms and for ease of living. We have corrected the inverted duty structure problems. We have resolved classification-related issues, and we have ensured that there is stability and predictability about the GST,” she said.  ALSO READ | Auto stocks rally on GST 2.0; Emkay sees M&M, Maruti as top beneficiaries 

On the downside, the Council announced a 40 per cent GST on all tobacco-related products such as pan masala, cigarettes, and bidi, as well as aerated water, caffeinated beverages, and carbonated drinks.

 

The new rates will take effect from September 22, the first day of Navratri.

Analysts view 

Kranthi Bathini, director-equity strategy, WealthMills Securities, is bullish on the FMCG sector as he believes that the stocks have been in a consolidation phase for a while. 

 

Meanwhile, domestic brokerage JM Financial Institutional Securities turned ‘Overweight’ on consumption stocks, in a report dated Sepember 2, 2025, on the bank of the Government of India and the Reserve Bank of India (RBI) taking robust steps to boost consumption via income tax cuts, interest rate cuts, an increase in banking system liquidity and the proposed GST rate reduction. 

 

The brokerage in its post-GST reforms report said that prima facie, based on the current salience of product segments which have seen reductions – Britannia, Colgate, Nestle, Dabur, Bikaji, DOMS should see maximum benefit.