August 22, 2025

Is GST the magic booster for the market or just a bumpy ride ahead? Dilip Bhat, Director at Padigree Advisory, shares his spicy take. “GST has been a good supporter for the market,” he says, pointing to the long-term hope that simplifying GST rates will unlock a surge in consumption. But there’s a catch - “in the short run, some amount of disruption is bound to happen.” Imagine shoppers waiting with bated breath, postponing their festival shopping, hoping for lower prices once GST rules get simpler. This hesitation is causing a pause in buying, making markets twitchy. "The government already gave good tax concessions in the last budget," Bhat adds, suggesting these benefits might kickstart demand soon. Right now, expect the market to shuffle sideways. "Fundamentals haven’t caught up with current market levels yet," he warns. Though Nifty’s estimated earnings might grow around 8% to 9% this year, valuations are fair but call for some correction. Plus, rollercoaster news like gaming policies, GST updates, geopolitics, and the on-again-off-again flow of foreign investors (FIIs) are stirring volatility. Switching gears to the buzzing FMCG sector, Bhat points out an intriguing dance. "Rural consumption is coming back strong," he notes, while urban demand is still finding its feet. The hope is that city buyers will soon join the party. When volumes pick up — without price wars — FMCG players might see profits climb thanks to better operating leverage. Inflation cooling down is another sweet breeze helping these companies. But here’s the twist: "Almost all FMCG companies are exorbitantly expensive," Bhat warns. So, while momentum in this sector looks promising for the next few quarters, the steep prices might make long-term investors pause and ponder. In short, markets are on a wait-and-watch mode, caught between hope and caution. Will GST simplification power the next big jump? Will rural demand rescue FMCG from pricey valuations? Investors, buckle up for a rollercoaster that’s both exciting and unpredictable!

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Tags: Gst, Stock market, Fmcg, Market volatility, Fii flows, Consumption,