M&M Jumps 6%; Other Auto Stocks End Marginally Higher After Sharp Intra-Day Rally on GST Reforms

Auto stocks ended marginally higher on Thursday, with the exception of Mahindra & Mahindra which climbed nearly 6%, as profit-taking ate away their sharp intra-day gains after the GST rate cuts announced on commonly used personal items and daily essential products.

At the close of trade, shares of Mahindra & Mahindra jumped 5.96%, Eicher Motors climbed 1.11%, TVS Motor Company went up by 0.98%, Apollo Tyres (0.13%) and Hero MotoCorp (0.06%) on the BSE.

The BSE auto index ended 0.69% higher at 58,129.51.

In intra-day trade, Mahindra & Mahindra surged 7.75%, Eicher Motors jumped 5.39%, TVS Motor climbed 4.20%, Hero MotoCorp rallied 3.56%, Bajaj Auto went up by 2.56%, and Apollo Tyres advanced 2.49%.

Shedding 738.66 points from the day's high, the 30-share Sensex finally settled 150.30 points or 0.19% higher at 80,718.01. The 50-share NSE Nifty ended marginally higher by 19.25 points or 0.08% at 24,734.30 after surging 265.7 points or 1.07% to 24,980.75 in opening trade.

"Indian equities witnessed a volatile session on Wednesday, swinging sharply between gains and losses before closing almost flat. Markets opened on a strong note, driven by sweeping GST reforms that simplified tax slabs to 5% and 18%.

"Auto, FMCG, and consumer durables stocks led the early rally, with Mahindra & Mahindra jumping over 7.50% alongside gains in Bajaj Finance, Hindustan Unilever, ITC, Tata Motors, and UltraTech Cement. However, much of this optimism was already priced in since the reforms were first proposed in mid-August, leading to heavy profit-booking at higher levels," Gaurav Garg, Analyst at Lemonn Markets Desk, said.

The GST Council approved limiting slabs to 5% and 18%, effective from September 22, the first day of Navaratri.

Petrol, LPG and CNG vehicles of less than 1,200 cc and not more than 4,000 mm length and diesel vehicles of up to 1,500 cc and 4,000 mm length would move to the 18% rate from the current 28%.

Motorcycles up to 350 cc would be taxed at a lower GST of 18% against 28% at present.

"Markets witnessed a volatile session and ended marginally higher, supported by sweeping GST reforms that signalled a structural tax overhaul. The Nifty opened on a strong note, led by sharp gains in auto and consumer staples, but profit-taking and weakness in select heavyweights dragged the index lower as the day progressed," Ajit Mishra, SVP - Research at Religare Broking Ltd, said.

Small hybrid cars will also benefit, while EVs will continue to be charged at 5%.

"All the revised GST rates are applicable from 22nd Sep'25 onwards, the day marked with the first day of the Navaratri festival. This reform aims to simplify the GST rates, ease compliance, create higher disposable income and stimulate long-term economic revival," according to a report by Axis Securities.

Some of the key sectors that could be key beneficiaries are insurance, consumer durables, building materials, automobiles, retail, cement, FMCG, and real estate, it added.

"The rationalisation of GST rates is a huge positive for the automobile sector, along with the implementation date of September 22, 2025. This addresses concerns regarding delayed sales with the onset of the festive season," Heet Chheda, Associate Analyst - Auto at Choice Institutional Equities, said.