GST cut next level of reform; 2025 a tricky year for investors: Vijay Kedia

The GST reforms could revive consumption-driven sectors like automobiles, FMCG, and discretionary goods, which have been under pressure, says Kedia

Markets have welcomed the developments on the goods and services tax (GST) rate rejig front. Vijay Kedia, veteran private investor, tells Devanshu Singla in a telephone interview that the short-term investors may continue to struggle as the market rally will be selective and not broad-based. Edited excerpts:

What is your take on the GST reforms announced by the finance minister yesterday?

 

Like everyone is saying, this is truly the next level of reforms. It was long overdue, but the government has finally brought it in. It’s a very good move—well received and expected too. It should strengthen the economy significantly.

 

From a market’s perspective, which sectors are likely to be most impacted?

 

The reforms are expected to boost consumption. So, consumption-oriented stocks should do well—automobiles, discretionary consumption, FMCG (fast moving consumer goods), etc. These sectors had been under pressure and facing a slowdown, but this should revive them. GDP growth was already at 7.8 per cent last quarter, and GST reforms should give it another push. Markets are rightly taking it positively.

Given the current tariff concerns and global uncertainties, where do you think the market is headed? How should investors position themselves?

 

This year is tough. Apart from tariffs, we are facing unusual natural calamities like the Uttarakhand floods, which we haven’t seen in decades. Many countries are dealing with crises at the same time. So, things are tricky.

 

If you have a long-term perspective of two to three years, you’ll make money. But short-term investors may struggle because the market is very selective—some sectors are performing while others are down 30–50 per cent from their peaks, even though the main index is just 4–5 per cent off all-time highs. Going forward, the rally will continue to be selective.

For someone with a long- or medium-term perspective, which sectors could be the dark horses?

 

Tourism has a lot of scope, especially domestic tourism. The government now realizes that many Indians travel abroad when India itself has underdeveloped but rich tourism potential. Anything related to tourism—airlines, hotels, ticketing platforms—can benefit.

 

Hospitals and hospitality should also do well, given rising demand. Infrastructure will remain a priority since India still lags global standards. And of course, deep tech and startups are the new sunrise sectors.

With the recent floods and terrorist attacks in Himachal, Uttarakhand, and Kashmir, do you see an impact on tourism and hospitality companies?

 

Yes, there was an immediate impact—many bookings got cancelled after the Jammu & Kashmir incident, as reported in your paper. But I see that as a one-time hit. Things are already improving, and while this season may have been affected, the outlook for next year is brighter.

Can you elaborate on mid- and small-cap stocks? How should investors approach this space?

 

Mid- and small-caps are mixed. Some are cheap, like PSU banks, but there are no takers. Others, like defence stocks, are expensive and remain so. The key is to invest in companies that are not performing today but have strong potential for the future. That’s where the value lies for long-term investors.

On tariffs specifically, which sectors are feeling the most pain?

 

Sectors like textiles, gems and jewellery, and other export-oriented industries are already taking a hit. For example, in Tiruppur, many textile orders have been cancelled. But these situations are temporary. In politics and economics, there are no permanent enemies—only shifting relationships.

 

Today we may not be aligned with one country, but tomorrow things change. The same is true globally. By early next year, I believe issues will settle down because no country wants to harm its own economy. The world is interdependent, and everyone will realize that.

So, overall, do you remain optimistic despite the near-term challenges?

 

Yes, absolutely. 2025 will be tricky, but with patience and a long-term perspective, investors will do well.