Latest news with #SiddharthaBera
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Business Standard
15-07-2025
- Business
- Business Standard
GST rate rejig: Tractors, ACs may emerge as key beneficiaries, says Nomura
Nomura on GST rate rejig: The long-pending overhaul of India's Goods and Services Tax (GST) structure may finally be gaining traction, with potential implications for sectors like agriculture and consumer durables. According to a recent note by Nomura, if the proposed rationalisation plan goes through - including the scrapping of the 12 per cent GST slab - tractors and air conditioners (ACs) could see meaningful tax relief that may drive demand and improve pricing dynamics. 'As highlighted in our analysis, tractors fall in the 12 per cent tax bracket. In the event this slab is removed, we believe tractors are more likely to be moved to the 5 per cent GST rate, rather than 18 per cent,' Kapil Singh and Siddhartha Bera of Nomura said. 'This should enhance affordability and stimulate demand, particularly ahead of the transition to stricter TREM-IV emission norms.' Nomura sees this as a tailwind for manufacturers like Mahindra & Mahindra (M&M), which commands a dominant share in India's tractor market. 'While OEMs are expected to pass on most of the tax reduction to end-users, the change could still improve pricing power and operating leverage,' the brokerage noted. The 12 per cent GST slab, introduced at the time of GST rollout in 2017, covers a wide range of goods, including packaged foods, household items, and select medical supplies. However, it has long been criticised as an unnecessary middle-tier that complicates compliance without delivering considerable revenue benefits. The GST Council, which is expected to meet later this month, is reportedly considering eliminating this slab entirely and migrating items to either the 5 per cent or 18 per cent categories. Durables, insurance may also benefit if slabs are realigned The consumer durables segment may also benefit, particularly ACs, which currently attract the highest GST rate of 28 per cent. 'ACs, along with TVs larger than 32 inches, are among the few household appliances still taxed at 28 per cent,' Nomura pointed out. 'If the Council decides to bring ACs down to 18 per cent, it would partially offset the cost impact from the upcoming Bureau of Energy Efficiency (BEE) norms effective January 2026, which are expected to increase prices by 3-5 per cent.' This could be particularly positive for listed companies like Voltas and Havells, with Nomura maintaining a 'Buy' rating on the latter. 'Any moderation in GST would help improve volume growth and mitigate the effect of cyclical input cost pressures,' the report stated. Term life insurance could also see a reprieve, with the GST rate on pure protection plans potentially being cut from 18 per cent to 5 per cent. 'Even at the reduced rate, insurers are likely to retain the ability to claim input tax credit,' Nomura added, suggesting that this could make term products more attractive to price-sensitive consumers. Compensation Cess regime may give way to targeted levies On the other hand, the end of the Compensation Cess regime - currently set for March 2026 - is unlikely to bring immediate relief for big-ticket items such as SUVs and luxury cars. Nomura believes the cess will likely be replaced with more targeted levies. 'We don't expect any material reduction in effective tax rates on large vehicles. The cess might be reintroduced under new heads such as a 'Clean Energy Cess',' it said. However, the introduction of any new cess outside the existing GST framework would require a constitutional amendment, as current GST law does not permit fresh levies of this kind. The Compensation Cess, originally designed to compensate states for revenue shortfalls post-GST implementation, has largely funded the Centre's borrowings during the pandemic. However, the proposed shift to a new cess framework - focused on health and sustainability - would require a constitutional amendment, as the current GST law does not allow the introduction of new levies outside the existing structure. 'The government appears to be signalling a shift away from transitional mechanisms to more policy-oriented levies that align with public health and environmental objectives,' Nomura concluded. While consensus on GST reform has proved elusive despite multiple Council meetings, including the most recent one in December 2024, Nomura's view suggests a window of opportunity may be opening for a long-awaited simplification of the tax structure.
Business Insider
28-06-2025
- Business
- Business Insider
Dixon Technologies (India) Ltd. (DIXON) Gets a Buy from Nomura
In a report released yesterday, Siddhartha Bera from Nomura maintained a Buy rating on Dixon Technologies (India) Ltd. (DIXON – Research Report), with a price target of INR21,409.00. The company's shares closed yesterday at INR14,473.00. Confident Investing Starts Here: Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter Bera covers the Consumer Goods sector, focusing on stocks such as Dixon Technologies (India) Ltd., Voltas Limited, and Bhartiya International Limited. According to TipRanks, Bera has an average return of 0.2% and a 44.44% success rate on recommended stocks. Dixon Technologies (India) Ltd. has an analyst consensus of Moderate Sell, with a price target consensus of INR14,286.67. The company has a one-year high of INR19,149.80 and a one-year low of INR10,613.00. Currently, Dixon Technologies (India) Ltd. has an average volume of 59.17K.
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Business Standard
23-06-2025
- Automotive
- Business Standard
85% of 2Ws to be impacted on ABS rule; Hero MotoCorp most exposed: Nomura
Nomura on Indian two-wheelers: The government's decision to make anti-lock braking systems (ABS) mandatory for all two-wheelers sold domestically from January 1, 2026, is set to impact nearly 85 per cent of the market, primarily vehicles in the sub-125cc category, analysts at Nomura said, in a note dated June 20, 2025. This is a major expansion of the current regulation, which only applies to models with engine capacity above 125cc. According to reports, the Ministry of Road Transport and Highways is expected to issue an official notification soon. The regulation is aimed at improving road safety by reducing accidents. ABS prevents wheel lock-up during sudden braking, helping maintain control and stability. In FY25, two-wheelers below 125cc formed the majority of domestic volumes. Internal Combustion Engine (ICE) motorcycles in this category accounted for roughly 76 per cent of sales at 9.26 million units, while scooter sales—almost entirely under 125cc—stood at approximately 7.1 million units. Combined, these segments contributed 16.9 million units, representing about 85 per cent of total domestic two-wheeler sales. Among OEMs, analysts at Nomura said Hero MotoCorp is likely to be the most impacted, with 99 per cent of its domestic volumes coming from the sub-125cc segment. Honda India follows with 89 per cent, while TVS Motor Company and Bajaj Auto are at 86 per cent and 72 per cent, respectively. Proposed rules may weigh on demand The proposed rule, while expected to boost safety, could weigh on demand, Nomura analysts said. The additional cost burden, estimated at ₹3,000 per unit (₹2,000 for the ABS unit and another ₹1,000 for a single disc brake where not already fitted), may lead to a price hike of 3–5 per cent. OEMs are likely to pass this cost on to consumers, which could dent demand—especially in price-sensitive entry-level segments like 100cc motorcycles, scooters, and mopeds. Industry demand could decline 2–4 per cent once the regulation is implemented, mirroring previous downturns following cost-driven changes such as higher insurance rates and BS-VI norms. Electric vehicles (EVs), too, excluding premium models like Ola S1 Pro and S1X Plus, will face pricing pressure. 'The percentage of revenue impacted for our covered OEMs could be: HMCL (about 79 per cent), TVS Motor (around 54 per cent), and Bajaj Auto (approximately 24 per cent). Most EVs, excluding Ola S1 Pro and S1X Plus, will also need to raise prices,' said Kapil Singh and Siddhartha Bera of Nomura. However, the brokerage highlighted that component suppliers stand to benefit from this rule. ABS producers such as Bosch and Continental are key players in this space. In disc brakes, Endurance Technologies leads with major market share, alongside global names like Brembo and Nissin. That said, while the regulation could be delayed for specific models due to required modifications, Nomura analysts believe the broader impact on the two-wheeler industry is expected to be major.
