NEW DELHI: Auto stocks surged in Monday’s morning trade, driven by optimism over the Centre’s proposed GST reforms expected by Diwali. Hero MotoCorp led the rally, jumping 8.70 per cent, followed by Maruti Suzuki (8 per cent), Ashok Leyland (7.95 per cent), Hyundai Motor India (7.68 per cent), TVS Motor (7.12 per cent), Bajaj Auto (5.18 per cent), Mahindra & Mahindra (4.72 per cent), Eicher Motors (4.52 per cent) and Tata Motors (2.87 per cent). The BSE Auto index climbed 4.48 per cent to 56,371.23.
“There are strong tailwinds for the market. The prime minister’s announcement on major GST reforms by Diwali is a big positive. Autos and cement, currently in the 28 per cent slab, stand to benefit significantly,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
On Sunday, Prime Minister Narendra Modi revealed that the draft of next-generation GST reforms had been shared with states for implementation ahead of Diwali. He had earlier flagged the plan during his Independence Day address from the Red Fort.
As part of the overhaul, GST on automobiles—currently taxed at 28 per cent plus a 1–22 per cent cess—will be rationalised to resolve disputes related to classification by engine size and vehicle length. Under the proposed two-tier structure of 5 per cent and 18 per cent, with a 40 per cent slab for select items, automobiles will move into a lower tax bracket.
According to government sources, the reforms are expected to make cars more affordable, boost demand and spur consumption, aligning with the Centre’s broader goal of stimulating economic growth.
