IFB Industries, PG Electroplast, Voltas and other consumer durable shares rally up to 20% on GST cut hopes

Shares of Voltas and other consumer durable companies surged up to 20% on Monday as investors cheered the prospect of a GST rate cut boosting the sector.

IFB Industries led the rally, climbing 20% to a day’s high of Rs 1,539, followed by PG Electroplast rising 13.6% to Rs 556, Voltas up 10% to Rs 1,402.65, Amber Enterprises gaining 8.7% to Rs 7,495, and Blue Star surging 8.7% to Rs 1,940.6 on the BSE.

The rally comes in the wake of Prime Minister Narendra Modi’s Independence Day address on August 15, where he hinted at "next-generation GST reforms" likely to be introduced ahead of Diwali. The Prime Minister emphasised that these reforms would be focused on reducing the tax burden on common citizens and boosting MSMEs, raising hopes across consumer-facing sectors.


One of the most anticipated changes is a possible reduction in GST on air conditioners (ACs) from 28% to 18%. Global brokerage firm Jefferies noted in a report that there is a "good chance" this cut could materialise as part of the reform package.

Why It Matters

The current 28% GST slab on items like air conditioners has long been a sticking point for manufacturers and retailers, as it keeps these products out of reach for a large chunk of middle-class consumers. A cut to 18% could: Lower prices, boosting affordability, Stimulate demand, especially in tier-2 and tier-3 cities, Improve volumes and margins for manufacturers and suppliers, revitalise the post-monsoon festive sales cycle, especially with Diwali around the corner

Companies like Blue Star and Voltas, which have a strong presence in residential cooling and commercial HVAC segments, are seen as key beneficiaries. Amber Enterprises, a major contract manufacturer for several AC brands, and PG Electroplast, known for its electronic component manufacturing, also stand to gain from the expected pickup in demand.

On the technical front:

PG Electroplast: The stock's daily RSI (14) stands at 17.8, which is well below the oversold threshold of 20. This indicates that the stock is currently in strongly oversold territory, suggesting the potential for a technical rebound in the near term.

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Voltas: The daily RSI is at 39.3, which is above the oversold mark of 30 but still relatively low. This suggests that while the stock isn't deeply oversold, it remains in a weaker momentum phase, with some room for upside if buying interest picks up.

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