The index has rallied more than 12 per cent since August 18, driven by optimism around next-generation GST reforms. The government cut the GST to 18% on most passenger vehicle categories, from as high as 31%, making cars and bikes more affordable ahead of the festive season, driving hopes of a pick-up in demand.
Over the past one year, the Nifty Auto index has risen 6 per cent, outperforming the Nifty 50, which fell 0.13 per cent in the same period. In 2025 so far, the auto index is up 19 per cent compared to a 5.7 per cent rise in the Nifty 50.
Auto sector outlook amid GST 2.0
The reform comes at a crucial juncture for the auto industry. Two-wheeler domestic sales rose 9 per cent year-on-year to 19.61 million units in FY25, slightly below the 13 per cent growth recorded in FY24. Passenger vehicle sales increased just 2 per cent to 4.30 million units, compared to 8 per cent growth last year.
Analysts note that rising ownership costs and weak rural demand have hurt the entry-level segment the most.
The GST cut is expected to revive demand, particularly during the festive season, which typically supports strong sales. Additionally, the Reserve Bank of India’s recent repo rate cut to 6 per cent is likely to lower EMIs and boost affordability, providing another tailwind for vehicle demand.
Amid these positive developments for the sector, analysts recommend which auto major among , and investors should buy for the long term.
Maruti vs Tata Motors vs Bajaj Auto: Which auto stock to buy?
Vinit Bolinjkar, Head of Research at Ventura Securities, sees Maruti Suzuki as the strongest long-term pick.
“The GST rate cut on two-wheelers, small cars, hatchbacks, and compact sedans is likely to support higher volumes during the festive season. Maruti Suzuki remains our top pick due to its dominant ~50 per cent market share, diverse product portfolio (petrol, CNG, hybrid, EVs), and growing export penetration in developing markets,” Bolinjkar said.
Bolinjkar named Bajaj Auto as his second choice, citing its wide portfolio of commuter and premium bikes, as well as its early lead in electric two-wheelers. He also highlighted the recovery in the three-wheeler segment as a growth lever. Still, he warned that intense competition from Ola, Ather, TVS, and Hero MotoCorp could cap market share gains.
Regarding Tata Motors, he stated that strong domestic commercial vehicle (CV) and passenger vehicle (PV) performance is likely, although weakness in Jaguar Land Rover (JLR) may continue to weigh on consolidated earnings.
Bajaj Auto shares have declined 18 per cent over the past year but gained 6 per cent in 2025 so far and 13 per cent in the past month. Maruti Suzuki has surged nearly 25 per cent over the past year, with a massive 40.5 per cent jump in 2025 YTD and a 21 per cent rally in the last month. Tata Motors, meanwhile, has fallen 27 per cent over the past year and is down 4 per cent YTD, but has recovered 9 per cent in the last month.
Technical View
Meanwhile, Kunal Shah, Technical Analyst at Mirae Asset Sharekhan, remains bullish on Tata Motors given its strong structure on tech charts.
“The Nifty Auto index corrected sharply from 27,969 to 19,317 before reversing trend. After breaking the 24,300–24,500 resistance zone, a strong rally followed. There is still upside potential toward 29,800, which corresponds to the 1.272 Fibonacci retracement level. Tata Motors looks attractive with a favourable risk-reward setup. We see 10 per cent upside from here, with support at 670 and targets at 800/830,” Shah said.
Meanwhile, Jigar S Patel, Senior Manager – Technical Research at Anand Rathi Shares, prefers Bajaj Auto for traders.
“The stock broke out above ₹9,000 on the weekly chart and is near ₹9,400 with strong MACD momentum. The structure resembles a cup-and-handle pattern, supported by an inverse head-and-shoulders setup — both bullish continuation patterns. Traders may consider staggered buying between ₹9,200–9,400 with a stop-loss below ₹8,900. The stock has potential to test ₹10,000 in the near term,” Patel said.
Conclusion for Investors
Analysts remain broadly optimistic about the auto sector, with the proposed GST cut and rate easing from the RBI expected to trigger a demand recovery in small cars and two-wheelers.
Long-term investors may consider Maruti Suzuki, given its dominant market share, wide product portfolio, and strong export growth. Meanwhile, Tata Motors and Bajaj Auto look promising as per tech charts in the near to medium term.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.