Aggarwal explained that the government may look to remove the 12% and 28% tax slabs. If items in the 12% bracket move to 5%, it will be manageable. However, the bigger impact will be if goods in the 18% bracket, such as biscuits, toothpaste and personal care items, are shifted to 5%. “If that happens, large FMCG players like Britannia, Colgate, Hindustan Unilever and ITC could benefit significantly,” he said.
On the discretionary side, Aggarwal expects white goods such as air-conditioners and refrigerators, currently taxed at 28%, to move to the 18% bucket. Some two-wheelers and entry-level cars may also see tax cuts, which would support sales.
EV taxation still unclear
Asked about the possibility of higher GST on premium electric vehicles (EVs), Aggarwal said the government may eventually consider taxing expensive EVs differently. “Today, EVs can cost Rs 40–50 lakh. Just like SUVs with higher taxes, premium EVs could face a higher GST rate in the long term. Whether it happens now or later, we will have to wait and see,” he added.
PSU banks and IT sector outlook
On banking, Aggarwal said public sector banks are in a better position compared to private peers due to lower exposure to unsecured lending. “SBI looks attractive in terms of valuation. Over the next six months, banks in general should perform better as margins stabilise,” he noted.
In the IT sector, he remained cautious. While valuations are attractive, growth visibility remains weak due to global slowdown concerns. “One can nibble at IT stocks, but it doesn’t look like a sector for big structural gains right now,” Aggarwal said.
Chemicals: Selective opportunities
Commenting on chemicals, he said some companies like SRF, Navin Fluorine and Aarti Industries could benefit from recent policy support, such as an extended export obligation period. However, global challenges, especially in the US, a major export market, remain. “Valuations are cheaper now, but investors should pick selectively,” he advised.
Markets waiting for a trigger
Aggarwal believes the broader market is currently in a “wait-and-watch” mode. While exports face risks from global tariffs, India’s domestic macros remain strong with good inflation numbers, tax cuts, and the prospect of GST reduction. “Markets are waiting for a trigger, and the festive season demand along with GST changes, could be that trigger. Over the next six to twelve months, investors should focus on fundamentally strong companies,” he said.
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