Nifty Auto Surges 2.3% on GST Boost; M&M, Eicher Motors Power Rally, Exide Lags

Mumbai, September 4, 2025 – The GST revisions announced by the Ministry of Finance last evening have given a critical boost to the auto sector, particularly to the manufacturers of small cars and two-wheelers under the 350cc category. The Nifty Auto Index surged 2.3% during the early morning trade and reached 26,369.25 at 09:50 AM. The overall index breadth was quite positive, with 13 advances and only two stocks declining. The benchmark has moved slightly closer to the 52-week high (27696.10) after today’s surge.

The index opened strong at 26,700.25, hit a day’s high of 26,729.65, before easing slightly. Turnover stood at ₹26,796 crore on 1.87 crore shares traded.

The Impact of GST Cuts on Auto Stocks

The simplification of GST slabs and reduction of GST by almost 10% for small cars, motorcycles (up to 350 cc), buses, and goods carriers is expected to work as a demand stimulant. The effective GST for small cars (less than 1200 cc for Petrol, LPG and CNG; up to 1500 cc for Diesel and up to 4000 mm length) has been cut down to 18% from 28%. The same rate cut is introduced for two-wheelers (up to 350 cc, 3-wheelers, buses, and carriage vehicles.

However, for mid and large-sized cars, the GST is fixed at 40%, replacing the earlier 28% + cess regime.

Top Movers and Laggards (09:50 AM)

Mahindra & Mahindra surged 6.31% to ₹3,493.30, nearing its record high of ₹3,550. Eicher Motors rose 2.47% to ₹6,529, while TVS Motor gained 1.57% to ₹3,453.80. Tyre makers and OEMs also advanced, with Balkrishna Industries up 1.42%, MRF up 1.41%, and Tata Motors climbing 1.29%. Component manufacturers joined the momentum, with Motherson (+1.26%), Bharat Forge (+0.74%), and Bosch (+0.63%) posting gains.

On the downside, Ashok Leyland slipped 0.37% despite GST cuts for CVs, while Exide Industries fell 1.29% after recent strength.

Market outlook

Lower GST on entry-level vehicles and two-wheelers is all set to stimulate volume growth during the festive season, while maintaining affordability for EVs and hybrids. The consolidation of higher-end cars into a flat 40% rate also brings clarity for OEMs.

REF: https://www.nseindia.com/market-data/live-equity-market?symbol=NIFTY AUTO

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