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Informist, Friday, Sept. 12, 2025

 

MUMBAI – Analysts expect shares of automobile companies to consolidate in the coming week as the positives from the goods and services tax rejig have been largely priced in. However, the momentum will pick up once there are visible signs of rise in sales volume with the festival season approaching, they said. Analysts expect the passenger vehicle sales, which have been under stress, to grow as they will become more affordable due to the tax cut.

 

Auto makers are positive about improvement in sales volumes due to the recently announced restructuring of goods and services tax. They have announced price cuts across models, promising to pass on full benefits of the GST rejig to end consumers. Mahindra & Mahindra was among the first to announce price cuts with immediate effect. Tata Motors, Bajaj Auto, Hero MotoCorp, and TVS Motors Co. also announced price cuts across models. Other unlisted players, Skoda Auto and Honda, have also slashed prices of their models.

 

"We expect domestic passenger vehicle segment volumes to accelerate from second half (Oct-Mar) of FY26," Kotak Securities said in a report. The broking firm expects the passenger vehicle segment to grow by 4-5% in 2025-26 (Apr-Mar) and a 7% compounded annual growth rate over FY26-FY28, driven by GST cuts, income tax relief, and 8th Pay Commission. "These factors should improve affordability and revive first-time and replacement demand," the broking firm said. "In terms of segment, we expect premium hatchbacks and the compact SUV segment to outperform." Additionally, the brokerage expects light commercial vehicles and tractor segment growth to accelerate, driven by lower costs, e-commerce uptick and strong farm economics. However, the medium and heavy truck segment will see limited benefits, it said. 

 

However, lack of clarity around GST compensation cess credit with automobile dealers is a serious issue that needs to be resolved. Lack of a mechanism to use the locked up cess credit on transition to the new GST regime means that dealerships will see a potential loss of INR 25 billion, as per dealers' estimates. Bigger cars have been attracting a 28% GST along with a compensation cess between 17% and 22%. This will now be replaced by a linear rate of 40% from Sept. 22.

 

"Nobody has complete clarity," a research analyst at a domestic brokerage said, when asked on how compensation cess will be managed amid transition to the new tax regime. "Cess is to be paid to the government and the dealers want some adjustment to this, either government will give refund or equipment manufacturers will have to support dealers by taking some hit," the analyst said. "At present, dealers are looking at a loss (due) to cess payment to the government," he added.

 

According to the Federation of Automobile Dealers Associations, vehicle retail sales for the month of August grew 2.8% on year, a rather slow pace as customers postponed their purchases on the news of GST cuts, wanting to avail the benefits from Sept. 22. Dealerships sold 1.96 million automobile units in August, a little higher than the 1.91 million units sold in the same month last year. Barring construction equipment and three-wheelers, all auto segments saw a year-on-year growth in retail sales. According to a survey by the automobile body, nearly 63?alers expect growth in sales in September, and nearly 78% of them expect growth in the next three months.

 

This week, the Nifty Auto index gained 2.1% and the Nifty 50 rose 1.5%. On Friday, the sectoral index closed 0.5% higher at 26866.65 points. Samvardhana Motherson International gained the most among the auto index constituents during the week, followed by Bharat Forge and Eicher Motors.

 

TOP HEADLINES

* India needs to show policy stability, predictability: Maruti Suzuki Takeuchi
* Endurance Tech acquires 8.9 acre in Tamil Nadu for automobile parts unit
* Need to resolve GST compensation cess credit issue, says M&M's Gollagunta
* Bharat Forge in pact to supply 155 mm howitzer barrels to UAE-based firm
* Bharat Forge, UK co sign MoU for cooperation in unmanned aerial vehicles
* JBM Auto secures $100-mln funding from IFC to deploy 1,455 e-buses
* Compact SUVs likely to benefit most from GST cut: Hyundai Motor India's Garg
* GST cut to trigger replacement demand for CVs, says Ashok Leyland's Agarwal
* Auto sector sales growth to bounce back to 6-7% next year - Maruti Suzuki ED
* Gadkari urged PM, finance minister for GST relief on vehicle scrapping
* Auto cos ask dealers for better inventory forecasting to anticipate demand
* Jupiter Wagons arm gets order worth INR 1.13 bln from Railway Board
* Eicher Motors arm VE Commercial to cut vehicle prices by up to INR 600,000
* Skoda Auto to cut prices of 4 car models by INR 63,000-INR 330,000
* Hero MotoCorp's 2-wheelers to get cheaper by up to INR 15,743 after GST cut
* Tata Motors, arms buy 26?ch in step-down arms TP Paarthav, TP Marigold
* Eicher Motors to reduce prices of 350 cc motorcycles by up to INR 22,000
* M&M Aug production rises almost 9% on year to 86,890 units
* Honda Cars India to pass on full benefits of GST relief to customers
* TV: Tax credit to remain unused in auto cos' books post GST cut: CBIC head
* Bajaj Auto to slash two-wheeler prices by up to INR 20,000 on GST rate cut
* HC junks Convergence Energy order to bar PMI Electro bid for e-buses supply
* Ola Electric sees no financial impact from inventory verification observation
* TVS Motor says it will pass on full benefit of GST rate cut to customers
* Urban India's appetite for 2-wheelers hits 11-month high in August
* Aug auto sales up only 2.8% YoY as customers defer buys on GST cut news: FADA
* Hero MotoCorp appoints Harshavardhan Chitale as CEO from Jan 5
* Mercedes-Benz India to cut prices by up to INR 1.1 mln after GST reforms
* M&M cuts prices of Thar, XUV, Scorpio models by INR 101,000-INR 156,000
* Renault India cuts prices of cars by INR 54,000-INR 96,000 on lower GST
* Will cut prices by up to INR 155,000 following GST rejig, says Tata Motors
* Spice Jet posts net loss of INR 2.34 bln for Apr-Jun, sales slump 34%

 

Following are the resistance and support levels for the stocks for next week as per calculations by Informist based on their prices on the National Stock Exchange:

 

Company	Price	Week-on-week  change in %	Resistance	Support
Apollo Tyres	475.45	(-)1.50	486.50	464.50
Ashok Leyland	134.09	2.50	137.70	131.00
Bajaj Auto	8999.50	(-)0.90	9286.80	8835.80
Balkrishna Industries	2388.70	3.50	2483.70	2322.50
Bharat Forge	1223.00	7.60	1245.10	1203.90
Bosch	39885.00	(-)2.50	41288.30	39088.30
Eicher Motors	6875.00	4.50	6982.00	6709.00
Exide Industries	418.55	1.40	430.70	411.90
Hero MotoCorp	5301.50	(-)1.20	5429.20	5222.20
Mahindra & Mahindra	3589.90	0.80	3663.30	3545.30
Maruti Suzuki India	15325.00	2.90	15503.70	15063.70
MRF	146570.00	(-)1.00	149333.30	144703.30
Samvardhana Motherson International	104.69	10.70	108.30	98.80
Tata Motors	715.25	3.40	725.40	702.30
TVS Motor Co.	3492.40	0.50	3586.60	3432.80
Nifty Auto	26866.65	2.10	27210.20	26612.90
Nifty 50	25114.00	1.50	25198.60	24995.80
BSE Sensex	81904.70	1.50	82197.80	81494.80

 

End

 

Reported by Gopika Balasubramanium 

Edited by Nishant Maher

 

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