2 Smallcap Stocks in Focus After GoM’s GST Rate Cut Proposal on Stationery Items

Synopsis:
Leading stationery marketers are in focus as GOM is expected to slash items GST rate to Nil from the existing 5 percent and 12 percent slabs. If this is implemented, it will significantly benefit the consumers.

DOMS Industries and Navneet Education are grabbing attention as the Group of Ministers (GoM) might suggest eliminating GST on essential stationery items during the upcoming GST Council meeting on September 3-4. This change could be a win-win for both manufacturers and consumers

What’s the news?

According to sources, the Group of Ministers (GoM) focusing on GST rate adjustments is expected to suggest a significant overhaul of tax slabs at the upcoming GST Council meeting set for September 3 and 4 in New Delhi. 

Among the proposals, there’s a plan to eliminate GST on items like erasers, maps, atlases, pencil sharpeners, pencils, and crayons. GST on erasers could drop from 5 percent to Nil, while maps, atlases, pencil sharpeners, pencils, and crayons may also move from 12 percent to Nil.

Additionally, exercise books might get zero GST instead of the current 12 percent, and mathematical boxes, geometry boxes, and color boxes could see a reduction from 12 percent to 5 percent.

However, it’s important to note that these are just initial proposals, and the final call will be made by the GST Council. If these changes get the green light, they could have a significant effect on stationery manufacturers such as DOMS Industries and Navneet Education, whose products are included in the affected categories.

DOMS Industries stands out as a top player in the stationery and art materials scene, crafting and selling a variety of products such as pencils, erasers, crayons, colors, markers, and creative kits. With a strong presence in India and beyond, they cater to students, artists, and professionals under the well-known DOMS brand.

Doms reported a revenue of Rs 562 crore in Q1 FY26, up by 26 percent from its Q1 FY25 revenue of Rs 445 crore. Coming to its profitability, it reported a net profit of Rs 59 crore in Q1 FY26, up 9 percent from Rs 54 crore in Q1 FY25. 

Navneet Education is another key player, focusing on publishing educational books and offering stationery products both in India and overseas. They operate under several brands, including Navneet, Vikas, Gala, Rise, Grafalco, and Youva, providing a range of textbooks, guides, workbooks, and digital learning solutions.

Navneet reported a revenue of Rs 794 crore in Q1 FY26, down by 0.5 percent from its Q1 FY25 revenue of Rs 798 crore. Coming to its profitability, it reported a net profit of Rs 157 crore in Q1 FY26, down 79 percent from Rs 747 crore in Q1 FY25. However, it is to be noted that an other income worth Rs 669 crore was reported during Q1 FY25.

Written by Satyajeet Mukherjee

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