FMCG

While the FMCG sector is more likely to gain indirectly led by focus on rural India or due to measures like implementation of GST next year, any reduction in VAT rate on biscuits from 12.5 per cent currently to 4 per cent should be positive for Britannia and ITC. Likewise, reduction in central sales tax from current 2 per cent levels will also be positive for all companies.

On the flip side, some analysts expect the government to roll-back the excise duty cuts done earlier. Should that happen, companies could pass on the increased costs by hiking prices and hence, the impact may not be really negative.

Analysts believe that there is a high probability of a hike in excise duty on cigarettes. However, any major increase (over 7 per cent) could potentially impact volume growth of cigarette companies like ITC.