M&M, Escorts Kubota, Tata Motors, Eicher Motors Share Price Surge as GST Cuts Spark Auto Rally

Market Performance

September 4 began with a bang for the markets, as auto stocks stole the spotlight. The fresh reforms from the GST Council set the tone, sparking sharp moves across the automobile pack.

The Nifty Auto index jumped more than 3%, hitting 26,612.20 — its highest level in nearly 11 months.

This surge was driven by heavy buying in M&M, Escorts Kubota, Tata Motors, and Eicher Motors, along with support from other leading auto counters.

Main News: GST Council’s Big Reset

On September 3, the GST Council concluded its meeting with a major decision — reducing GST rates on small cars.

• GST rate cut: From 28% → 18%
• Applies to:
  • Petrol, LPG, CNG cars with engine capacity up to 1200 cc and length up to 4000 mm
  • Diesel cars with engine capacity up to 1500 cc and length up to 4000 mm

This move is expected to lower ex-showroom prices by 5–7%, benefiting popular models like:

• Maruti Swift
• Hyundai i10
• Tata Punch
• Compact SUVs including Brezza and Venue

Small hybrids also fall under the 18% GST bracket, giving them a price advantage.

Company Details: Auto Stocks on the Move

• Mahindra & Mahindra (M&M): Jumped nearly 7%, trading around ₹3,505 per share
• Escorts Kubota: Biggest gainer, up nearly 9% in early trade
• Eicher Motors, Tata Motors, Maruti Suzuki: Rose 2%+ each
• Hero MotoCorp, TVS Motors: Added around 1%

Tractor makers too found relief as GST on tractors was cut to 5%, sparking strong traction in Escorts Kubota shares.

GST Rate Highlights Across Vehicle Segments

• Small cars (Petrol ≤1200cc / Diesel ≤1500cc, length ≤4000mm): GST reduced to 18%
• Large cars & SUVs (Petrol >1200cc / Diesel >1500cc, length >4000mm): GST hiked to 40% from 28%
• Luxury & premium vehicles: No cess now, but remain in 40% GST slab
• Pure EVs: Continue at just 5% GST
• Two-wheelers ≤350cc, three-wheelers, ambulances: Shifted to 18%
• Motorcycles >350cc: GST increased to 40%

The removal of the earlier cess (1%–22%) over the base GST rate means premium and luxury vehicles see marginal relief, despite being in the higher 40% bracket.

Summary

The auto sector witnessed a sharp rally as investors priced in the impact of GST rate cuts.

• Nifty Auto index up 3%
• M&M, Escorts Kubota, Tata Motors, Eicher Motors led the gains
• Small cars and two-wheelers benefit most from lower GST
• Luxury vehicles and larger cars move into the 40% tax bracket
• EVs remain incentivized at 5% GST

The policy reset comes just ahead of the festive season, giving automakers a strong demand boost and reshaping momentum in the market.