Amber Enterprises India, Voltas, Havells shares gain up to 9% on GST 2.0; top stock picks

Shares of white good manufacturers such as Voltas India, Havells India, Whirlpool of India Ltd and Blue Star climbed up to 10 per cent in  Monday's trade amid hopes the GST rate on such appliances would be reduced to 18 per cent from 28 per cent at present. 

At present, Room AC and dishwasher are taxed at 28 per cent, while washing machine and refrigerator are taxed at 18 per cent GST. Televisions below 32 inches attract 18 per cent GST and higher than 32 inches attract 28 per cent GST. 

Blue Star Ltd surged 8.77 per cent to Rs 1,940.60. Amber Enterprises India shares (supplier to AC companies0 climbed 8.74 per cent to hit a high of Rs 7,495. Tata group's Voltas advanced 5.98 per cent to Rs 1,351.45. Havells India Ltd jumped 4.18 per cent to Rs 1,541.15. Whirlpool of India Ltd rose 4.67 per cent to Rs 1,299.50.

"A reduction in GST is positive for RAC and dishwasher. It can also drive premiumisation in televisions as people can upgrade to televisions of > 32 inches. While reduction in indirect taxes is DCF accretive, there is possibility of near-term impact on trade inventory if companies reduce the prices immediately," ICICI Securities said.

The brokerage said white good makers have historically passed on indirect tax benefits to consumers. Hence, there will not be any material scope for margin expansion. 

"Generally, volume growth also does not materially change. However, there is potential for driving premiumisation. Key beneficiaries: Blue Star, Voltas, Havells (Lloyd), Whirlpool," it said.

Nomura said AC manufacturers were already proposing for an 18 per cent rate GST for 5 star rated products which would shift demand to more energy efficient products and lower overall power consumption. 

"As of now, only ACs and >32-inch TVS fall under 28 per cent GST which can potentially entirely shift to an 18 per cent GST regime. This would imply 8 per cent lower prices for consumers and benefit demand. More importantly it would help clear the excess channel inventory in the system. This would be positive for AC
players such as Voltas (~69 per cent from AC) and Havells (~24 per cent from AC)," it said. 

That said, the upcoming BEE norms coming into effect from January 2026 for ACs would raise the cost of product by 3-5 per cent and the net reduction for the consumer would be marginal at best and would depend on the upcoming summer season, analysts said.

"Overall improvement in consumer sentiments due to the GST cuts will be positive for Havells," Nomura said.

Havells India benefits, as 24 per cent of its topline comes through Lloyd's EMS, said MOFSL.  Amber Enterprises India, it said, is a key supplier to AC companies and should benefit if RAC's GST rate lowers from 28 per cent to 18 per cent.