Indian biscuit, snacks and toothpaste makers to benefit most from proposed tax cuts, Nomura says

Britannia Industries

03/09/2025 10:13

** Proposed reductions in India's goods and services tax (GST) will drive formalization of consumer goods industries, Nomura says

** Marico MRCO.NS, Tata Consumer TACN.NS and Britannia Industries BRIT.NS are brokerage's top picks

** BRIT, with 80% of revenue from biscuits and Colgate-Palmolive (India) with 80% revenue from toothpastes COLG.NS to benefit most from tax rate cut on staples to 5% from 18%

** Quick service restaurants, thanks to reduced tax on key material cheese, as well as snacks --Bikaji BIKA.NS-- and stationary makers --ITC ITC.NS-- to benefit most from tax rate cut to 5% from 12%

** Meanwhile, if GST rate on cigarettes rises to 40% and all other taxes are unchanged, Nomura argues this would lead to a roughly 7% increase in effective tax burden for companies like ITC, "which we believe will be passed on to consumers without any major backlash."

** However, ITC could see lower volumes if main GST rate as well as other taxes are raised on cigarettes -- Nomura

** Indian consumer stocks .NIFTYFMCG have risen 4% since Prime Minister Narendra Modi announced tax cut plans on August 15

 (Reporting by Nandan Mandayam in Bengaluru)

 ((Nandan.Mandayam@thomsonreuters.com; Mobile: +91 9591011727;))