Auto stocks in demand as GST cuts drive optimism

Auto stocks advanced on Thursday after the GST Council reduced tax rates on small cars and motorcycles up to 350cc, while hiking duties on high-end bikes.

The Nifty Auto index rose 1.83% to 26,246.85, outperforming the Nifty 50 which gained 0.54% to close at 24,849.50.

Mahindra & Mahindra led the rally with a 5.85% jump, followed by Eicher Motors up 2.02%. TVS Motor rose 1.21%, Bajaj Auto gained 1.05%, and Balkrishna Industries added 0.96%. Hero MotoCorp climbed 0.93%, MRF advanced 0.75%, and Tube Investments of India gained 0.73%. Tata Motors was up 0.51%, Bosch added 0.46%, Motherson rose 0.20%, while Bharat Forge inched 0.10% higher.

In contrast, Maruti Suzuki slipped 0.50% amid profit booking.

The GST Council on Wednesday announced sweeping changes in tax rates for the automobile and two-wheeler sector. GST on small cars and motorcycles with engine capacity up to 350cc has been reduced from 28% to 18%, a move aimed at boosting demand in the mass mobility segment. Additionally, parts and accessories of motorcycles up to 350cc will now attract 18% GST instead of 28%.

On the other hand, the levy on premium motorcycles exceeding 350cc has been sharply raised from 28% to 40%, making high-end bikes costlier.

The new rates, effective 22 September 2025, are intended to rationalize the tax structure, encourage affordable mobility, and provide relief to middle-class consumers.

Powered by Capital Market - Live News