Indian auto stocks were on fire in today’s trade, rallying sharply after reports suggested that the government may soon cut Goods and Services Tax (GST) rates on small cars. The move, if implemented, is expected to lower ownership costs, boost affordability for entry-level buyers, and provide a big push to an industry that has been lobbying for relief.
The buying frenzy lifted the Nifty Auto index by 1,008 points, closing at a record 25,127, its sharpest single-day jump in recent months. The optimism sent benchmark auto counters soaring to record levels. Maruti Suzuki surged 8.75% to an all-time high of Rs 14,125, while Hyundai Motor India shares jumped 8.15% to Rs 2,464, also a lifetime peak. Mahindra & Mahindra climbed 3.6% to a new high of Rs 3,432, buoyed by strong SUV demand and fresh investor interest.
Two-Wheelers and CV Makers Join the Rally
The positive sentiment wasn’t limited to passenger cars. Two-wheeler majors and commercial vehicle manufacturers also participated in the rally.
– Eicher Motors (Royal Enfield parent) hit a record Rs 6,024, gaining 2.57%.
– TVS Motor soared 6.6% to touch an all-time high of Rs 3,255.
– Hero MotoCorp jumped 5.86%, while Bajaj Auto climbed 4.57%.
– Smaller players like Atul Auto added 3.57%, while Escorts advanced 6.57% on strong tractor and agri-equipment demand.
In the commercial vehicle space, Ashok Leyland was a standout, rallying 8.04% to an all-time high of Rs 132.8, reflecting hopes of stronger demand from fleet operators if GST cuts make small vehicles more attractive for business users.
Tyre Stocks Roll Higher
Ancillary stocks, especially tyre manufacturers, also joined the rally on expectations of higher volumes. MRF gained 4.36%, Apollo Tyres surged 7.44%, JK Tyre added 4.36%, and CEAT advanced 4.56%.
Market Mood and Outlook
Analysts said the rally reflects growing investor confidence that the government will prioritize demand stimulation ahead of the festive season. A cut in GST on small cars, currently taxed at 28% plus cess, could revive a segment that has lagged in recent years due to affordability challenges.
“The market is factoring in a demand revival cycle for the auto industry. A GST cut will not only benefit OEMs but also the entire value chain – from component suppliers to tyre makers,” said a Mumbai-based market strategist. With auto heavyweights leading from the front, the sector was among the top gainers on the exchanges today. Investors will now keep a close watch on the upcoming GST Council deliberations for formal confirmation of the move.
