GST Rate Cuts Boost Apparel and Real Estate Stocks: Trent and Godrej Properties Lead Gains
The Goods and Services Tax (GST) Council's recent rate cuts on apparel and cement have led to a significant boost in the stock prices of apparel and real estate companies. Stocks like Trent and Godrej Properties have seen notable gains.
GstReal EstateApparelStock MarketEconomic ReformsReal Estate NewsSep 04, 2025
During its meeting on September 3, the GST Council made several key decisions. One of the most notable was the reduction of the GST rate on apparel priced up to Rs 2,500 from 12 percent to 5 percent. Previously, only apparel priced up to Rs 1,000 fell under the 5 percent tax bracket. However, the GST rate on apparel and clothing accessories priced above Rs 2,500 was increased from 12 percent to 18 percent.
Trent, a leading retail company, saw its shares jump more than 3 percent to trade at Rs 5,660 apiece. The stock has gained nearly 7 percent in the past five days and over 13 percent in the past six months. Its current P/E ratio stands at around 127.5. Other retail stocks also saw gains, with Vishal Mega Mart and Shoppers Stop shares rising by nearly 3 percent and 2 percent, respectively.
The GST Council also decided to cut the GST rate on cement from 28 percent to 18 percent. This reduction is expected to lower costs for real estate companies, thereby improving their margins and profitability. As a result, real estate stocks, along with cement stocks, saw a significant rise in the morning trading hours.
Godrej Properties, a prominent real estate developer, saw its shares gain nearly 2 percent to trade at Rs 2,048 apiece. Other real estate stocks, including Raymond, Prestige Estates, and Macrotech Developers (Lodha), also saw gains of nearly 2 percent each. Oberoi Realty, Brigade Enterprises, and DLF shares gained around 1 percent each. The Nifty Realty index was up around 1 percent, hovering near 898.05.
Garima Kapoor, Economist and Executive Vice President at Elara Capital, commented on the impact of these GST rate changes: 'Very critical items like cement have seen a cut from 28% to 18%, which should be a huge positive for the infra sector. The efforts to further ease the compliance burden on tax filers are positive and should aid ease of doing business. Today’s GST rate changes, along with RBI’s rate cuts, income tax rebates announced in the FY26 budget, and easing inflation are all levers for a consumption uptick in the economy. We expect GST-related demand boost to add 100 to 120 bps to the GDP growth over the next 4-6 quarters, thereby nullifying the negative impact of higher tariffs on exports to the US.'
These reforms are expected to have a positive impact on the overall economy, particularly in the apparel and real estate sectors. Investors and analysts are optimistic about the potential for increased demand and improved profitability for companies in these industries.
Frequently Asked Questions
What was the primary reason for the rise in apparel and real estate stocks?
The primary reason for the rise in apparel and real estate stocks was the reduction in GST rates on key items by the GST Council. The GST rate on apparel priced up to Rs 2,500 was reduced to 5 percent, and the GST rate on cement was reduced from 28 percent to 18 percent.
How much did Trent's stock price increase?
Trent's stock price increased by more than 3 percent, trading at Rs 5,660 apiece.
Which real estate stocks saw significant gains?
Godrej Properties, Raymond, Prestige Estates, and Macrotech Developers (Lodha) saw gains of nearly 2 percent each, while Oberoi Realty, Brigade Enterprises, and DLF gained around 1 percent each.
What is the expected impact of these GST rate changes on the economy?
The GST rate changes are expected to add 100 to 120 basis points to the GDP growth over the next 4-6 quarters, nullifying the negative impact of higher tariffs on exports to the US. This is expected to boost consumption and improve the overall economic environment.
What other reforms were announced by the GST Council?
The GST Council also decided to cut the GST rate on cement from 28 percent to 18 percent, which is expected to lower costs for real estate companies and improve their margins.
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