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Shares of paint companies climbed on tax rate cut. Asian Paints jumped 5 per cent to Rs 1,464.4, Akzo Nobel climbed 2.3 per cent, Nerolac rose 1 per cent, Berger Paints gained 0.3 per cent.
The Centre and States have come together to unveil an over Rs 9,000-crore ‘package’ for middle-class consumers. Products on which the GST rate cut is applicable include kerosene stove (18 per cent to 12 per cent), paint and varnish (28 per cent to 18 per cent), scents/perfumes (28 per cent to 18 per cent), mixers and grinders (28 per cent to 18 per cent), water heaters (28 per cent to 18 per cent), handicraft products such as handbags and jewellery (18 per cent to 12 per cent) and handmade carpets, floor covering etc (12 per cent to 5 per cent).
The rate cut could provide material boost to Asian Paints' and other paint companies' earnings, says Kotak's Rohit Chordia. The brokerage has raised FY19-21 end EPS by 7-13 per cent on Asian Paints.
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