Lower GST rate leading to enhanced profitability for Motilal Oswal's top 3 selected stocks, offering an estimated growth of up to 17%

Motilal Oswal Bullish on Various Sectors, Highlights Gains in Automobiles, Insurance, and Hospitality

In a recent report, Motilal Oswal, a leading brokerage firm, has shown optimism towards several key sectors, predicting substantial growth for businesses in automobiles, life and health insurance, and the hospitality industry.

The firm remains positive on the hospitality sector, particularly Lemon Tree Hotels, anticipating the company to sustain its growth trajectory in the upcoming fiscal year (FY26). Motilal Oswal has set a target price of Rs 195 on Lemon Tree Hotels' stock, implying a 16% potential upside from current levels. The optimism stems from the company's strong expansion, having recently signed six new properties across India, adding 413 rooms to its portfolio.

In the automobile sector, Motilal Oswal predicts significant benefits for Mahindra & Mahindra (M&M) due to the sector tax overhaul. The brokerage has set a target price of Rs 3,687 on M&M's stock, implying a 12% upside. The new GST structure has effectively reduced prices across various sectors, including automobiles, by removing a 28% GST plus cess on most passenger vehicles and replacing it with a lower rate.

The life and health insurance sector is also expected to see gains, as life and health insurance premiums will no longer attract GST after September 22. Motilal Oswal expects a 17% upside in HDFC Life's stock due to higher demand from cheaper insurance policies after the GST rate revamp. The brokerage noted that HDFC Life continues to focus on enhancing channel economics through a multi-pronged strategy - diversifying the product mix, driving cross-sell and upsell, leveraging the bank's digital assets, and improving customer experience.

Motilal Oswal has also highlighted Phoenix Mills and HDFC Bank as positively impacted by the revised GST law. Phoenix Mills has been upgraded to "buy" due to growth potential from new shopping centers. HDFC Bank was identified among stocks benefiting from GST cuts.

The brokerage has released new 'Buy' calls across several sectors, including consumer, health & life insurance, automobiles, education supplies, electronic goods, and the cement sector.

Moreover, the Goods and Services Tax (GST) Council has implemented a rate revamp, with SUVs above four metres now attracting a lower GST rate of 40%, down from the earlier effective 43-50%.

In the food delivery space, consumer-facing businesses like Swiggy continue to raise platform fees, a trend Motilal Oswal views as positive for growth and profitability.

These developments indicate a positive outlook for the identified sectors, offering potential growth opportunities for investors.

Lower GST rate leading to enhanced profitability for Motilal Oswal's top 3 selected stocks, offering an estimated growth of up to 17%