Shares of most auto makers rallied after the Finance Minister slashed the corporate tax rates on Friday.
Meanwhile, the S&P BSE Sensex was up 1,174.29 points or 3.09% to 39,188.91.
The market surged after the Finance Minister Nirmala Sitharaman on Friday, 20 September 2019, slashed corporate tax rate to 22% without exemptions. The effective corporate tax rate after surcharge now stands at 25.17%. The step has significant positive implications for corporates' profitability, broader economy and market valuations.
The S&P BSE Auto index was up 447.50 points or 2.62% at 17,528.04, underperforming the Sensex.
Escorts (up 9.84%), Ashok Leyland (up 6.86%), Eicher Motors (up 5.42%), Maruti Suzuki India (up 5.25%), Bajaj Auto (up 2.57%), TVS Motor Company (up 2.01%) and Hero MotoCorp (up 0.78%) advanced.
Mahindra & Mahindra (down 0.58%) and Tata Motors (down 4.16%) declined.
As on 31 March 2019, Eicher Motors paid a corporate tax of 34.43%. Escorts paid 32.88%. Hero MotoCorp paid 32.45%. Bajaj Auto paid 30.25%. TVS Motor Company paid 30.23%. Maruti Suzuki India paid 29.71%. Mahindra & Mahindra paid 28.76%.
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