Auto stocks from Tata Motors to M&M remain top gear as GST buoyancy continues

Auto stocks, from Tata Motors to Mahindra & Mahindra, are seeing strong buying interest in Monday’s trading session, with investors responding positively to recent GST rate cuts on several vehicles.The rally builds on momentum since August 15, when Prime Minister Narendra Modi promised 140 crore consumers a big Diwali gift of lower consumption taxes.

The Nifty Auto index surged 2.5% in morning trade, with 13 of its 15 constituents trading higher. Key gainers include Bharat Forge and Ashok Leyland, which rose up to 6%.

Stock / Index	Move Since Aug 15
Nifty Auto	+11%
TVS Motor	+17%
Hero Moto	+17%
Eicher	+15%
Bajaj Auto	+13%
Maruti	+16%
M&M	+12%

Companies pass on GST cuts to consumersSeveral automakers have passed the full benefits of the GST reduction to customers.

– Mahindra & Mahindra (M&M): Price cuts up to ₹1.56 lakh on models including Bolero, Scorpio, Thar Roxx, and XUV700, effective September 6.

– Tata Motors: Price cuts of up to ₹1.55 lakh on passenger vehicles and up to ₹4.65 lakh on commercial vehicles, effective September 22.- Hyundai: Price cuts up to ₹2.40 lakh on models like i20, Venue, Creta, Alcazar, and Tucson, effective September 22.

What brokerages say

Bank of America (BofA) wrote in its note that the auto sector is well-positioned for an upcycle, supported by drivers such as reduced cost of ownership, easy credit, and crude price stability.

BofA projects volume growth at an 8% CAGR over FY25-28, in line with 0.8x nominal GDP growth.

Two-wheelers (2W): The upgrade market is supported by high household penetration, rising financing options, and increasing consumer aspiration. Eicher and TVS are expected to benefit from both cycle and rural demand.

Passenger Vehicles (PV): Growth is shifting from premiumisation to broader penetration. Maruti Suzuki is a preferred play on the cycle and SUV launches, while M&M’s product strength remains strong.