- GSKCH, UBBL, BRIT, APNT, ITC, PGHH, JUBI, PAG, UNSP, NEST and CLGT (all coming under 33-35% tax bracket on earlier forecasts for FY20-21) will be the biggest beneficiaries of the lower corporate tax rates effective from FY20. All these companies are expected to see an EPS increase in the range of 12%-13% for FY20 and FY21 (keeping other assumptions unchanged).

- Other names likely to benefit are HUVR/PIDI/TTAN (between 29% and 32% tax rates) with EPS upgrade in the range of 6-10%.

- MNCs are the biggest gainers. This means that companies like Dabur and GCPL (which do not see material gains from the corporate tax cuts) are likely to be less attractive on a relative basis, particularly if HUVR and CLGT step up promotional efforts in categories like oral care and soaps.

- It is important to look at absolute tax savings rather than percentage tax savings because PBT margins for larger companies in paints, jewelry, QSR, biscuits, etc., are significantly higher.

- However, as a result of the corporate tax cuts, BRIT and CLGT move above MRCO and UNSP in the pecking order, as the event was neutral for MRCO and gains on UNSP could be tempered a bit if states increase excise duties significantly.

Disclaimer: The above report is compiled from information available on public platforms. inChat team advises users to check with certified experts before taking any investment decisions.

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