Will GST cuts be enough to re-rate auto stocks?
Analysts say a GST cut could reset the growth base for autos and trigger earnings upgrades, but questions remain on whether the boost will last.
BNP Paribas analyst Kumar Rakesh told CNBC-TV18 that a price cut could reset the base for the industry and lead to sizable earnings upgrades. “Historically, we have seen the price elasticity for passenger vehicles is about two times, so an 8% reduction in prices could potentially lead to almost 16% incremental volume growth,” he said.
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