Shares of Bikaji Foods, Gopal Snacks, and Prataap Snacks experienced notable gains, rising to 9% in a single trading day. This surge came in response to the Indian government's recent decision to reduce the GST rates on packaged snacks. If you're looking to invest in stocks, this development could be a key factor to watch. The new GST regulations are aimed at benefiting companies in the snack industry, potentially making them attractive options for investors.
In a significant move, the GST Council of India, led by Finance Minister Nirmala Sitharaman, announced a reduction in the GST rate for ethnic snacks and packaged namkeen products. The rate has been cut from 18% to 12% as per the latest decision made on Monday, September 9. However, snacks produced through the extrusion process will be taxed at 18%, while un-fried or uncooked snack pellets will see a reduced rate of 5%. This change, effective from the announcement date, is set to impact the financials of companies involved in snack production.
Shares of Gopal Snacks Ltd saw a significant jump of 8.5%, reaching ₹354 per share on Tuesday. This increase came after the government's GST rate cut announcement, which positively affected the market capitalisation of the company, now exceeding ₹4,300 crore. Gopal Snacks is known for its diverse range of ethnic snack products, including namkeen and gathiya, making it a notable beneficiary of the reduced tax rate. For those looking to invest in stocks, the company's strong market performance could present an interesting opportunity.
Prataap Snacks Ltd, which markets its products under the 'Yellow Diamond' brand, experienced an over 8% rise in its share price, reaching ₹877.10. This surge boosted the company's market capitalisation by more than ₹2,000 crore. The company's share price had closed at ₹811.70 the previous day. Investors who are keen to invest in stocks related to the snack industry might find Prataap Snacks' growth trajectory particularly appealing in light of the new GST regulations.
Bikaji Foods International Ltd also saw a notable increase in its share price, rising 7.67% to ₹899. This puts it just below its 52-week high of ₹901. The company's market capitalisation now stands close to ₹22,000 crore. Bikaji Foods, with its extensive range of snack offerings, is another prime candidate for those looking to invest in stocks. The GST rate cut is expected further to enhance the company's profitability and market appeal.
The reduction in GST rates is set to benefit companies like Bikaji Foods, Gopal Snacks, and Prataap Snacks. For investors keen to invest in stocks within the snack sector, these developments may provide a promising opportunity.
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