Which BSE-30 (Sensex) Companies have gained from the Corporate Tax Cut??

The Finance Minister Ms. Nirmala Sitharaman had announced the Tax Cuts in Corporate Taxes on 20th of September 2019. The stock markets have responded to the decision magically. And the Sensex had zoomed from 36,093 on 19th September 2019 to 39,097 on 23rd September 2019 thereby giving a gain of 8%. This was very simple: the Corporate Income Tax was reduced from 30% to 22%. And this 8% reduction in Corporate Taxes has culminated in the increase of the Share Prices. The reduction in Tax increases the PAT (Profit After Taxes), and that increases the EPS (Earnings Per Share) of the company to that extent. And any increase in the EPS has to ultimately reflect in the Share Prices of the Company. So the entire Stock Market and the investors enjoyed the momentum. But from that peak point of 23rd September the Stock Markets are coming down till today. While writing this blog the Sensex was at 38,128. So it slipped from 39,097 on 23rd Sep 2019 to 38,128 on 3rd Oct 2019. Of course, it seems that it was a period of Profit Booking. And this gain on account of Tax Cut was as high as 8% to 14% in some BSE-30 companies.

In the year 2018 the Sensex has given a return of 11% (from 29,910 to 33,255). And the same Sensex gave 16.89% returns in the year 2019 (from 33,255 to 38,872). And this Sensex is growing at a CAGR of 6.58% for the last 5 years. You will be surprised to know that only 15 stocks have contributed to the gain 2018. I mean those stocks which have given more than 10% gains. And in the year 2019 too, only 11 stocks have given more than 10% gains. Only these 12-15 stocks are contributing to all the gain in the Sensex in the FY18 and also in the FY19. Ligend in the Table is: Security is the 30 Stocks in the Sensex, Price is the current price, Change is difference from the previous closing price, % is the percentage change, ROI18 is the returns given by the Security in the FY 2018, ROI19 is the returns given by the Security in the FY 2019, Tax1 is the gain in the Security on account of Tax Cuts from 19th Sep to 23rd Sep, and Tax2 is the further gain or loss in the Security from the peak of 23rd Sep to till date (that is as of now). Let us see the below analysis: