Nifty Auto Index Jumps 4% on GST Cut Buzz — Hero MotoCorp, Maruti, Ashok Leyland Among Top Gainers

Index Movement

The Nifty Auto Index rallied over 4% on August 18, 2025, as expectations of a GST cut on automobiles triggered heavy buying in auto stocks.

• Previous Close: 24,118.80

• Opening Level: 24,804.65 (+2.8%)

• Intraday High: 25,118.85 (+4% from previous close)

Government’s GST Cut Proposal

According to a Reuters report, the government is weighing a proposal to reduce GST on small cars from 28% to 18%. The tax rejig is expected around Diwali, as part of Prime Minister Narendra Modi’s broader plan to simplify GST into a two-tier structure with most goods taxed at either 5% or 18%.

Analysts expect the move to:

• Boost small car and two-wheeler sales

• Support hybrid vehicles

• Provide relief to entry-level passenger vehicle segments currently facing volume pressure

Key Gainers

• Hero MotoCorp: +7%

• Maruti Suzuki India: +7%

• Ashok Leyland: +6%

• TVS Motor Company: +6%

• Bajaj Auto, M&M: +4%+

• Tata Motors: Significant gains on both PV and CV segments

Brokerage Views

• Motilal Oswal Financial Services (MOSL): Expects Maruti, Tata Motors, and Ashok Leyland to be major beneficiaries as four-wheelers move from 28% GST to 18%.

• Jefferies India: Identifies two-wheelers, small cars, and hybrids as the key winners if GST cuts are implemented.

Market Outlook

If implemented, the GST cuts would mark the deepest tax reduction since 2017, improving affordability, boosting demand, and potentially lifting sales volumes for leading auto manufacturers.

Summary

The Nifty Auto Index surged 4% on August 18, 2025, on strong expectations of a GST rate cut for automobiles. Hero MotoCorp, Maruti, and Ashok Leyland led the rally, while analysts see Maruti, Tata Motors, and two-wheeler makers among the biggest beneficiaries of the proposed tax changes.