GST Relief, holidays to help recover business profit in Q3, says Radhika Gupta of Edelweiss MF

The newest GST reform from the government is a much needed step to revive the question, to relieve inflation and support the domestic sectors in the midst of global uncertainty, according to Radhika Gupta, MD & CEO of Edelweiss Mutual Fund.

Speaking with et now, Gupta said that the move comes at the right time, when India is confronted with external pressure of rates and weak global question. “Quarter one income demonstrated inertia in consumption. The government had previously given tax lighting to the consumer, and this GST reduction is another important measure. It makes goods useful, reduces inflation and stimulates demand in important sectors, sustainable consumers and cars,” she said.

Domestic companies to win

Gupta believes that investors should concentrate on companies with a strong domestic base instead of those that are exposed to worldwind of global trade. “Chemicals, jewelry and textile are confronted with tariff risks, while domestic consumption, capital markets and health care are better placed. The clear rotation is to India-oriented companies,” she explained.

Edelweiss MF has already qualified in accordance with this display. Gupta emphasized that the Fund House launched a consumer fund earlier this year, with allocations in FMCG, sustainable consumers and cars, about large, mid and small caps. “We were already overweight on consumer shares and cars, so this reform only strengthens our statement,” she said.

Gedempte but positive market reaction

On the answer from the market, Gupta noted that although the announcement was expected, the message was clear. “The removal of the 28% plate and simplification to two plates – 5% and 18% – issues a strong signal. Together with previous tax cuts and the RBI liquidity support, this creates positive messages for the middle class,” she said.

She added that the festive season, starting in October, combined with GST Relief, should help recover the business profits in the second half of the year. “Q1 was weak and Q2 can stay lukewarm, but the q3 number should improve. Markets can remain accessible in the short term, but profit growth in the second half will be the key for Momentum,” Gupta said. Las also | GST 2.0 shares to buy: list of 90 winners of top brokers

Bond market stable despite tax costs

About worries about the tax tension, Gupta said that the bond market has properly absorbed the estimated RS 48,000 crore turnover position. “On a GDP basis, this is only about 7 BPS. With the recent rating upgrade of India and the fact that this step is de-inflatoire, bonds and currency markets must remain stable,” she added.