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Shailendra Kumar
The introduction of the Goods and Services Tax (GST) on July 1, 2017 was a very important step in the field of indirect tax reforms in India. Its transparent and self-governing nature will contribute immensely to economic growth.
A reform as gigantic as the GST will continue to progress for a few more years, addressing a number of implementation issues related to computer systems, legal challenges, exports, filing and reconciliation, disclosure transition credit, anti-profit GST, etc. It is only after the GST mechanisms have been smoothed that the economic aspects of the GST can be fully implemented.
has certainly created ripples, winners and losers, and pockets of anxiety. But, as we say, we always overestimate what is happening in the short term and underestimate the change that will happen in the long term.
Despite all the criticism of the implementation of the new tax system, the government remained very receptive to comments. The total number of indirect taxpayers increased from 66.17 lakh to 1.12 crore. At the same time, there has been a sharp increase in voluntary registrations. More than 54.3% of people eligible for the dialing plan have instead chosen to be regular filers.
In the run-up to the implementation of the GST, manufacturing states were anxious that the move to a destination and to the tax would shift the tax base to the consuming states. But things went very well here. The recovery of the GST has not resumed as planned, but this is understandable since the GST Council itself has declared that the collections were based on a "unilateral declaration". Once the "anti-avoidance" and e-way law is effectively implemented, revenue collection from the GST will improve
Formal enterprises, defined as businesses forming part of the formal tax net and / or providing to their employees EPFO / ESIC benefits, employ only 57% of the non-agricultural workforce (240 million) in the country. Formalization would change the social fabric of these large working mbades, creating in turn a huge consumption as well as a demand for credit.
With the GST, the increasing urbanization and the premiumization of an aspiring middle clbad will tip the balance of power in favor
Manufacturers of jewelry, plywood, clothing, dairy products, baggage, air coolers and confectionery would be the main beneficiaries of this trend. On the services side, hospitals, diagnostic centers, contract agents, retailers, hotels, microfinance companies and logistics service providers will be the main beneficiaries.
In 1991, the Indian economy experienced a country adopted a new economic policy marked by liberalization and privatization. The GST will also have a strong impact on our economy in the future.
5 shares to buy on this subject:
Quess Corp: Buy | Target – Rs 1,350 | Yield – 18%
While Outsourcing the Manpower / Business Services (Outsourcing the workforce + Facility Management + Maintenance) is a mature business in the developed world, this activity is still nascent in India.
The leading player in this field in the UK in its first phase of growth recorded a CAGR of 23% and a market capitalization of 44%. Quess has created an excellent platform in the large space of business services.
Management is confident of a 50% year-over-year growth for the foreseeable future: 20% organic growth and 30% external growth. The EBITDA operating cash flow is expected to increase in the future. Our short-term goal based on DCF is Rs 1,350.
Trent: Buy | Target – Rs 355 | Return – 18%
The organized retail trade industry in India accounts for more than 10% of the overall retail sector, compared with 20% in China and over 80% in the United States. -United. Demonetization and the GST, along with changing lifestyles, have resulted in a significant value migration from unorganized retail to organized selling.
We believe that the retail sector is expected to grow by 20% over the next five years. Trent's strong balance sheet, strong commercial positioning and store expansion plan make it attractive for long-term investments. Target of Rs 355 involves 4x EV / Sales on FY20.
Century Plyboard: Buy | Target – Rs 305 | Yield – 21%
MDF Organized Player Firms replace the worst-performing plywood companies in the unorganized player category.
Although competition has intensified within organized groups of MDF, accounts for more than 2/3 of the market) especially after the strict implementation of Bill E-Way gives confidence that management would keep its promise of a revenue growth of 25 percent in 19. Target of Rs 305 implies 2.5 EV / Sales on FY20
TCI Express: Buy | Target – Rs 700 | Yield – 21%
GST and electronic invoice would result in a transfer of market share to organized logistics players
Express delivery is a premium and an important segment of the industry of logistic. The segment is expected to grow more than 17% year-over-year over the next three years.
TCI Express focuses primarily on the most profitable segment of the B2B space. Management expects 2.5x volume growth over the next five years and EBITDA margin is expected to increase from 11% to over 15% over the next two years. Target of Rs 700 implies 23 P / E on FY20
Titan Company: Buy | Target – Rs 1,050 | Yield – 19%
The market share of organized actors in the jewelery industry is tiny and suggests growth when the GST stabilizes by 2020.
Titan aspires to increase its jewelry sales of 150% between fiscal years 2018-23F. Growth will lead to further margin expansion driven by operating leverage
The share of high-value diamond jewelry sales is expected to increase from 30% of diamond jewelry sales to 18% to 23%. FY23
. should reach 50% by 23 years old. A higher proportion of foreign exchange sales reduces the vulnerability to importing gold brakes. The goal of Rs 1050 involves 10x P / B on fiscal year 20.
Disclaimer: The author is Chief Investment Officer, Narnolia Financial Advisors Ltd. The opinions and investment advice expressed by the investment experts on moneycontrol.com are his, and not that of the site or its management. Moneycontrol.com advises users to check with certified experts before making any investment decision.
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