Bajaj Finance, Bajaj Housing Finance shares rally up to 7% on GST reform hopes
Tired of too many ads?
Remove Ads
Why the rally matters
Tired of too many ads?
Remove Ads
Credit upgrade boost
Wider market lift
Shares of Bajaj Finance and Bajaj Housing Finance surged up to 7% on Monday, as investors piled into financial stocks on hopes of potential Goods and Services Tax (GST) cuts and relief from India's first sovereign credit rating upgrade in nearly two decades. Bajaj Finance rose as much as 6.7% to Rs 919.15 on the BSE, while Bajaj Housing Finance gained 3.9% to Rs 117. The rally tracked a broader market rebound after six weeks of declines, with investors betting on sweeping tax reforms to be announced by Diwali.Analysts say Bajaj Finance stands to gain from lower Goods and Services Tax rates on consumer durables, which would cut monthly instalment costs and expand lending volumes in its key financing segments.'EMI obligation for consumer durables should reduce, benefitting NBFC lending in this segment,' Motilal Oswal noted. The brokerage included Bajaj Finance on its list of top stock beneficiaries from GST rationalisation.Bajaj Housing Finance, meanwhile, moved higher on expectations that stronger consumption and household balance sheets could spill over into credit markets. Alongside this, both Bajaj Finance and Bajaj Housing Finance stand to gain from the sovereign rating upgrade, which analysts said would ease offshore borrowing costs for Indian financial firms.The rally also drew strength from S&P Global Ratings' decision to lift India's long-term sovereign credit rating to 'BBB' from 'BBB-,' the first upgrade in 18 years. Analysts expect the move to cut offshore borrowing costs for Indian financials.'S&P upgrade-related beneficiaries – this is a significant macro and structural positive for the overall Indian market,' Motilal Oswal said. 'Indian financial companies, such as Bajaj Finance, accessing the ECB market could see a 15–20bp reduction on their coupon payments.' Lower funding costs would strengthen both Bajaj Finance's lending margins and Bajaj Housing Finance's ability to expand in mortgages.The reform and rating buzz rippled through autos, insurance, and consumer firms. Shares of Maruti Suzuki, Mahindra & Mahindra, Hero MotoCorp, Bajaj Auto and Eicher Motors gained between 2% and 8%, while ICICI Prudential, SBI Life and LIC rose 2%–4%. The broad-based gains pushed benchmark indices more than 1% higher.Investors now await the October GST Council meeting, where the final rate cuts will be decided, setting the tone for Diwali demand and the next leg of financial sector growth.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Hindustan Times
4 minutes ago
- Hindustan Times
Removal of 12% & 28% GST slabs gets GoM backing, up to council now for decision
Removal of the 12% and 28% slabs of the Goods and Services Tax (GST) was supported, with some suggestions, by the relevant Group of Ministers (GoM) on Thursday. It now goes to the GST Council for final consideration, following up on Prime Minister Narendra Modi's Independence Day announcement of rationalising the indirect tax regime. Finance Minister Nirmala Sitharaman (right) chairs a meeting of Group of Ministers (GoMs) constituted by the GST Council on at Vigyan Bhawan, in New Delhi.(X/@FinMinIndia) Once the move is approved by the GST Council, only the 5% and 18% slabs of the existing four will remain; plus a 40% slab may be introduced for ultra-luxury goods. The GST Council, which is led by union finance minister Nirmala Sitharaman and has ministers from all states as members, will consider the feedback, including questions on states' share and compensation for revenue loss. "Everyone made suggestions over the proposals made by the Centre. Some states have a few observations. This has been referred to the GST Council. The council will make a decision," said Bihar deputy chief minister Samrat Choudhary, convener of the GoM on Compensation Cess, Health and Life Insurance, and Rate Rationalisation, constituted by the GST Council. 'Not clear on revenue loss, compensation to states' Another member, West Bengal health minister Chandrima Bhattacharya, told reporters, "I raised in the meeting that if the states are going to lose the revenue… then we want to know how we are going to be compensated. The GoM will now send its report to the GST Council with the notings of our concern." She added, "We don't know what is the revenue loss by this GST rate cut. They have not assessed yet. In the GST Council we will get to know." Uttar Pradesh finance minister Suresh Khanna also told PTI, "The presentation given at the Centre did not mention how much loss is being incurred. But our point is that the common people should benefit from this." Announced by PM Modi on August 15 from the Red Fort, the move to eliminate the 12% and 28% brackets is part of a wider effort to simplify the tax regime and cut disputes.
Time of India
6 minutes ago
- Time of India
Midcaps, consumption and cement to lead market upside in H2: Pankaj Pandey
"On the consumption side, there are multiple triggers in place. Whether it is FMCG or autos, we are pinning a lot of hopes on the second half for volume revival. So far, volumes have been muted, but we have enough triggers—from GST to the 8th Pay Commission, which may come into effect next year, along with tax benefits. As a result, the entire consumption basket looks strong. Even niche categories like hotels are looking particularly good, making them another sector to watch," says Pankaj Pandey , Head Research, While we often speak about the IT sector , the start of the earnings season was a miss for the larger IT players as their earnings came in weaker. However, we are now seeing a comeback in the IT space. We also categorically mentioned earlier that one should keep an eye on mid-cap IT companies, as that is where conviction will start to build. Having said that, in the first half of the year, we saw several challenges coming from the global front, and Indian markets had to digest a lot of uncertainties. Moving into the second half, the earnings season began with a mixed bag, but it was soon followed by positive developments—government measures, liquidity support, economic indicators, and encouraging data points. What, according to you, will act as the trigger? Do you see a festive mood for the domestic market and an upsurge over the next five months? Pankaj Pandey: Oh yes, the second half looks quite good for a number of sectors. For example, in cement, while Q2 might be soft because of the monsoon, the overall sense is that EBITDA per tonne will be maintained. The sector already had a good Q1 and is expected to continue doing well. Similarly, in steel, we may not see an improvement in EBITDA per tonne, but we definitely expect stronger volume growth, which should help. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like They Are Unstoppable: The Most Beautiful and Talented Female Athletes Undo On the consumption side, there are multiple triggers in place. Whether it is FMCG or autos, we are pinning a lot of hopes on the second half for volume revival. So far, volumes have been muted, but we have enough triggers—from GST to the 8th Pay Commission, which may come into effect next year, along with tax benefits. As a result, the entire consumption basket looks strong. Even niche categories like hotels are looking particularly good, making them another sector to watch. We are also positive on tier-II beneficiaries of real estate. For example, in the pipe sector, we expect benefits in the second half from channel inventory restocking, along with better volume growth. Accordingly, companies like Astral and Supreme look attractive. Even for banks, while Q2 will see maximum margin pressure, from Q3 onwards things should improve. So, overall, the second half looks far more promising, and that is why we believe Nifty levels around 27,000 should not be a big challenge—except for export-oriented sectors. Live Events On the insurance plays—we were just speaking with Niva Bupa—but considering companies like HDFC Life , SBI Life, Star Health, and Max Financial, now that GST on insurance premiums is proposed to be zero, do they make good investment cases? Pankaj Pandey: The second half should be better for insurance plays. However, with GST at zero percent and without input tax credit, there could be margin challenges since companies may have to pass on some benefits. From that perspective, I am not very bullish on insurance. What we like more are AMCs. Inflows have been robust, and with overall AUM growth plus inflows, this segment can easily deliver mid- to high-teen growth from a long-term perspective. Companies like HDFC AMC and Nippon look quite attractive to us. Staying on the GST theme—given the rate rejig that is underway—what other sectors, apart from staples, stand to benefit? What about cement and two-wheelers? Pankaj Pandey: For cement, the GST reduction will result in around a ₹25 decline per 50 kg bag, which is clearly positive. Last year, the sector's growth was muted at just 4%, but this year we expect more normalised growth, with most pricing hikes holding up. We like the cement pack across the board—from UltraTech and Ambuja to smaller names like Sagar Cements and JK Lakshmi. Autos are another major beneficiary. While two-wheelers are already a penetrated category, four-wheelers are expected to do better. We have been positive on M&M, our top pick, but Maruti also stands to gain significantly since cars remain aspirational and volumes have been muted. In two-wheelers, we prefer Eicher Motors because of its aspirational products, and recent volumes have been strong. So, both two- and four-wheelers should do well. For CVs, I am not very confident as growth will be challenging, with companies guiding for mid-single-digit growth. So, we are less focused there. But PVs and two-wheelers look much stronger after the GST cut. What is your take on Godrej Properties ? How do you see this news impacting the stock, and what is your overall outlook on the realty pack? Pankaj Pandey: In real estate, tax cuts and lower interest rates will start benefiting the sector, but this advantage will largely accrue to tier-II and mid-segment players. The premium segment is already doing well, and much of that upside has been factored in. I don't have a specific view on Godrej Properties, but overall, geography-specific challenges exist. For example, the E-Khata issue in Bangalore or super-premium demand moderating in NCR. So, one needs to be selective. We like larger players like DLF , which have a balance between annuity and retail businesses. Max Estates is another name we like, along with Arvind SmartSpaces. Overall, we are more positive on home-building products than on developers themselves. Price corrections in home-building products have been decent, and things are looking up for them—pipe companies, for example. So, we are relatively more positive on the home-building segment than on the broader real estate sector.
Mint
6 minutes ago
- Mint
Expert view: Indian stock market may remain rangebound with opportunities in niche areas, says Trivesh D of Tradejini
Expert view: Trivesh D, COO, Tradejini, believes the Indian stock market may remain in a range until IPOs and block deals slow and earnings growth begins to catch up with valuations. In an interview with LiveMint, Trivesh shares his views on market valuations, sectors he is positive about and more. Edited excerpts: I feel the current phase is likely to take some more time to play out. It would ease only when supply from IPOs and block deals slows and earnings growth begins to catch up with valuations. Until then, the market is likely to remain range-bound with selected opportunities in niche areas, as excess stock supply and stretched prices keep upward momentum in check. The market is now experiencing volatility and dealing with multiple pressures, while turbulence in tech stocks and sector-specific headwinds are adding to the uncertainty. Corporate earnings remain a key concern, as weaker business investment and hiring could drag consumer spending and overall economic momentum, even though some sectors continue to show resilience. With valuations stretched and IPO supply absorbing liquidity, the Nifty's year-end trajectory will hinge on whether earnings and credit growth can strengthen enough to support current prices. Without such improvement, further gains may be limited. That said, optimism remains for better macro conditions ahead, with falling inflation, government focus on infrastructure spending, and steady domestic flows through SIPs providing support. Global cues, especially stability in oil prices, will also play an important role in shaping sentiment as we move closer to year-end. Overall, Indian markets are not very cheap at present, particularly when compared to the valuation of global peers, but the lack of strong earnings momentum raises concerns. Markets may stay under pressure unless earnings revive. On the happier side, the Prime Minister's Independence Day announcement on GST reform, which involves cutting tax slabs, is a meaningful development. Lower GST means products in sectors like autos, consumer goods, cement, and insurance become more affordable, which can lift consumption and manufacturing and support the economy. Over time, this translates into stronger earnings visibility for these industries, which is why markets see it as a positive tailwind. But this effect can only be seen after the implementation. In my view, investors should remain vigilant while tracking corporate performance and global trade as well. While policy support continues to drive opportunities in the power sector, particularly renewables, logistics, and pharma are also emerging as value plays, helped in part by tariff-related positioning. Additionally, if seen, midcaps in industrials, healthcare, and NBFCs are increasing the interest for their long-term potential as valuations ease. Strong Q1 performances from cement, oil and gas, and utilities keep these sectors in focus, but the broader approach at the moment is about connecting the dots, not trying to win outright. Read all market-related news here Read more stories by Nishant Kumar Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of the expert, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
