GST Reform Push: Emkay increases Nifty Target to 28,000 before September 2026, chooses its 5 top shares

Brokerage company Emkay Global Financial Services has increased Nifty’s target to 28,000 before September 2026 with cars and cement as the preferred games. The upgrade will be on the back of the Rationalization Proposal for Goods and Services Tax (GST) that could act as a repetition of catalyst for the market, given the long-term growth.

In its latest India strategy report entitled ‘GST 2.0-Unlasming Growth’, Emkay GST mentioned rationalization as a milestone, growth-related reform that could become a potential market remover.

The six -week Downtrend must reverse, supported by I) a equipment improved profit views, and II) ratings that reflect the wider positives of this historical reform. The Emkay sector position remains unchanged: OW -Consumer -Discretionary, with a preference for blacksmiths in staples and cement within materials.

According to Emkay, the effects of the second order will be considerable, which accelerates the formalization of the economy and the global competitiveness of domestic companies will be improved. This brokerage is of the opinion that the government should absorb the loss of income in the short term due to a higher deficit, because the growth boost will probably compensate for the deficit within 2-3 years.

In his address of Independence Day on Friday, August 15, Prime Minister Narendra Modi announced about the reform, with the aim of condensing the current structure in two records.

From the tax regime with four rates, the government could only retain two 5% and 18% records while decreasing 12% and 12% plates. There could be a higher 40% SIN tax on alcohol, cigarettes and game companies. “This reform is a considerably positive for India, because it offers a consumption boost, simplifies business activities through fewer tax plates and stimulating a greater formalization of the economy by making tax evasion less attractive,” said the brokerage.

Beneficiary sectors

Emkay calls it a large boost for cars, sustainable and cement, sees passenger vehicles (PVs), 2Ws, ACS, cement and packaged foods to probably take advantage of the GST movement. Emkay’s advice to investors is to best play these themes through companies that tackle mass segment brands in each category

Shares to buy

Emkay chooses Hero Motocorp, Maruti Suzuki, Voltas and Ultratech as important stocks; Bikaji is an idea of a small cap.

“The benefits are produced into a narrow segment of the market (9.5% of Nifty) with a negligible (lower than 1%) direct profit confirmation for Nifty,” said Emkay, where 10-15% profit per share for companies in the relevant sectors was estimated.

Emkay reserved

Emkay expects the center to absorb a tax slip of 0.1%/0.2% in FY26/FY27, which must be partially compensated by income for buoyancy and sale of assets.

Emkay said that nearly 70-75%of the GST income is derived from items below the 18%plate, while the 28%, 12%and 5%leaves are 14%, 5%and 7%, respectively, and the provisional estimates suggest that the proposed rationalization of the proposed rate could cost the Exchequer of GDP).

The government led by BJP will have to pierce the reform by bringing the states on board.

Implementation age lines remain uncertain, given the Meerstap’s approval process. In

The upgrade of S&P from the sovereign rating from India to BBB is another important positive.

(Disclaimer: recommendations, suggestions, views and opinions of the experts are their own. These do not represent the views of economic times)