Up to 18% surge in 1 month: Is GST-led rally in auto stocks near its end?

Auto stocks in India have surged 7-18 per cent on GST reforms. Analysts, however, warn of near-term correction amid . Long-term outlook bullish for PV, 2W, and CV segments.

A plethora of tailwinds for the automobile sector, including a cut in goods and services tax (GST) rates, is keeping analysts bullish on auto stocks from a long-term perspective, even as they see the rally running its course in the near-term.

 

Auto stocks, they pointed out, have rallied 7-18 per cent since Prime Minister Narendra Modi announced that the government would roll out “Next-Gen” GST reforms before Diwali 2025, stretching valuations into slightly uncomfortable zones.

 

"Indian auto stocks have outperformed the benchmark Nifty50 meaningfully since August 15 in anticipation of acceleration in demand due to the GST reduction. Current valuations,