shares declined 0.98 per cent to ₹14,780 during afternoon trading on Wednesday despite positive sentiment from the government’s GST rate cuts that will reduce automobile prices significantly. The stock opened higher at ₹15,240 before giving up gains, with trading volumes reaching ₹759.28 crore.
The GST council approved substantial rate reductions across automobile segments, cutting taxes from 28 per cent to 18 per cent for small cars and motorcycles under 350cc. Auto parts will now attract a uniform 18 per cent GST rate. The changes, effective September 22, are expected to reduce on-road prices by mid-to-high single digits for two-wheelers and low-to-high single digits for passenger vehicles.
Arun Agarwal of Kotak Securities said the price cuts would stimulate demand recovery, particularly in mass-market categories, with auto component players having higher domestic exposure set to benefit from stronger OEM demand. However, export-dependent players will see limited benefits.
The beneficiaries include Maruti Suzuki, Bajaj Auto, TVS Motors, Hero MotoCorp, and Hyundai. Rahul Singh of Tata Asset Management called the GST rationalisation a serious effort to boost consumption ahead of the festive season, following income tax cuts and lower interest rates.
Shripal Shah of Kotak Securities noted the timing benefits festival demand against the backdrop of global trade tensions, with the move potentially lifting both market sentiment and consumer spending.