The Indian government’s revision of the Goods and Services Tax (GST) structure that will take effect on 22nd September 2025 will cause a major impact on the Indian taxation scene. The new two-slab GST system (5% and 18%) will seek to improve consumption, lessen compliance burden and improve transparency across a range of industries. Traders and representatives will have an extraordinary opportunity to alter portfolios and identify stocks that stand to benefit. 

This blog will plan out the top 7 stocks to buy in GST 2.0, as well as discuss why they will be benefiting and what traders should be thinking about from their respective angles to get the maximum return.

1. Mahindra & Mahindra (M&M)

Mahindra & Mahindra is likely to be among the largest beneficiaries in the auto space. The GST reduction on large vehicles, including SUVs, from 50% to 40%, as well as the cut on tractors from 12% to 5% adds value to M&M’s core business segments. 

• Passenger Vehicles:  M&M’s slight edge in SUVs should have greater demand based on the lower costs of ownership.
• Agriculture Focus: Lower GST on tractors, tractor tires, and spare parts will drive rural spending and farm mechanisation. 
• Government Alignment: The changes are complementary to rural development, enhancing M&M’s prospects for further growth in agri-machinery.

Investors should feel comfortable with both mid-term volume growth and potential stock rerating. 

2. UltraTech Cement

The cement sector has been at the mercy of high GST rates for decades. With GST rates dropping from 28% to 18%, demand is expected to ramp up as infrastructure and housing would be more affordable.

• Cost Efficiency: A lower GST rate decreases end-user pricing, which usually stimulates housing demand.
• Increasing Infrastructure Spend: As India’s largest cement player, UltraTech is well-positioned to capture more of the government’s and private capital spending towards Infrastructure.
• Margin Expansion: Lower input tax will help assure favourable profitability for cement producers and ultimately cement plants as well. 

Reason for Capital Markets: For traders, this represents cyclic growth with a long examples as a defensive position linked to long-term infrastructure demand.

3. HDFC Life Insurance

The removal of individual life and health insurance from GST will be a major shift. Insurance policies will be more affordable for households, which will provide overall higher penetration levels in Tier-2 and Tier-3 cities. 

• Improving Affordability: The reduction in premiums with no tax will bring more first-time policyholders.
• Industry-Wide Benefits: Other insurers will benefit too, and HDFC Life isn’t the only player in the individual life and health insurance; players like SBI Life and ICICI Prudential will also see gains.
• Structural Growth: India has historically had low insurance penetration compared to the world, and the tax exemption could provide a trigger for growth.

HDFC Life will be in a good position to benefit from this demand expansion through reform, with its large brand and distribution network.

4. Escorts Kubota

Escorts Kubota is also an important beneficiary of the recent GST cuts on tractors. The newly enacted GST rate decrease from 12% to 5% creates improved affordability of farm equipment, which increases the demand across rural India.

• Dual Benefit: In the tractor sector, Escorts, Kubota and M&M maintain the lion’s share of the market, which further strengthens the advantage for both companies.
• Rural Momentum: The timing is also right with the advance of the festive season, districts coinciding with favourable flooding levels.
• Market Sentiment: Traders should recognise a similar tendency of tractor stocks to run harder during rural-led policy announcements, which again fits with the narrative of the GST 2.0 announcement.

5. Hindustan Unilever (HUL)

Within the fast-moving consumer goods (FMCG) distribution category, GST cuts from 18% to 5% on daily necessities – toothpaste, talcum powder, and shampoos- should be a highly demand-enhancing factor.  

• Affordability Factor: If products become cheaper, this directly stimulates household consumption.   
• Volume Growth: HUL, with its vast rural penetration, lets us expect it to be a prime beneficiary of more affordability in rural areas of small towns and villages.    
• Stable Growth: The defensive growth aspect of FMCG stocks makes them appealing in periods of market volatility.   

HUL is already a leader and now has additional tailwinds from GST changes. 

6. Bata India

The GST rate on shoes selling below ₹2,500 has been decreased from 12% to 5%, giving reasons for happiness to Bata India and Metro Brands.

• Consumer Consumption: Footwear below ₹2,500 is likely to see an increase in demand.
• Retail Ecosystem Expansion: Reduced taxes may allow these companies to venture further into semi-urban and rural markets.
• Festive Season Demand Fuel: Given that GST 2.0 is happening at the same time as Navratri, the demand may increase during this festive buying period.

For the trader, Bata India provides short-term consumption-led momentum and long-term retail ecosystem expansion opportunities.

7. Adani Green Energy

The GST 2.0 makes a solid positive impact on the renewable energy space. The tax on solar cookers and solar water systems, and components has been reduced from 12% to 5%. This is a very positive outcome for renewable companies such as Adani Green Energy. 

• Clean Energy Push: Reducing the GST to a lower number essentially allows for lower-priced solar products, which allows for a much quicker adoption of solar solutions. 
• Government Policy Tailwind: This tax relief aligns exceptionally well with India’s aggressive objectives to expand renewable energy capacity. 
• Long-Term: As the wider world moves towards ESG investing, Adani Green strengthens its growth trajectory. 

This stock is a trade for traders, but it’s also a secular growth story.

Top 7 Stocks to Buy in GST 2.0

Trader Takeaways for GST 2.0

What Traders Need to Know

There are many opportunities for traders in these GST reforms. Here are the main aspects to keep in mind: 

• GST Implementation Date: New rates coming into effect on September 22, 2025, on the first day of Navratri. 
• Market Psychology: Expect considerable volatility leading into the Implementation and afterwards – perhaps we will see some ideal short-term trades. 
• Sector Rotation: Watch for flows into certain sectors that will benefit, such as auto, cement, FMCG, and insurance. 
• Rural Consequence: With tractors, FMCG goods, and footwear less expensive, rural demand may come back with a bang. 
• Politics: Traders should monitor policymakers to see if further steps are taken which continue to extend the GST benefits into other types of industries.

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Conclusion

The GST 2.0 is a major reform with a two-slab structure and a critical reform for the Indian economy. It simplifies taxation, enhances affordability and boosts consumption for many sectors. For traders, this sets up a once-in-a-decade opportunity to re-align portfolios and participate in reform-led growth. 

The top 7 stocks to buy in GST 2.0, namely, Mahindra & Mahindra, UltraTech Cement, HDFC Life Insurance, Escorts Kubota, Hindustan Unilever, Bata India, and Adani Green Energy, will also see the benefits from those changes. If a trader tracks the sectoral movement, momentum from the festivities and rural demand patterns, there are huge actionable opportunities to benefit in a post-reform market. 

As always, reforms provide good tailwinds, but traders must have discipline with stop-losses, position sizing, and be live on top of any government policies. But the GST 2.0 has set the stage for some smart traders.

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