Two-Wheeler Sales May See New Records With GST 2.0 Boost: ASK Automotive’s Kuldip Rathee

Auto ancillary major, ASK Automotive Ltd., expects to significantly benefit from the anticipated GST reforms, expecting boost in demand, especially in the aftermarket segment, Chairman and Managing Director, Kuldip Singh Rathee, said on Aug. 25.

Speaking to NDTV Profit, he called it a major positive for the auto sector, particularly the two-wheeler segment which still hasn’t recovered to FY18–19 volume levels.

“GST 2.0 is really good news for the sector. As you know, the two-wheeler sector has not even touched the volumes that it touched in FY18-19. Due to Covid and BS4 and BS6…two-wheelers, which used to be about Rs 60,000…. Now it is not less than Rs 90,000. So, demand has not been healthy. GST is great news. I’m optimistic that this financial year itself, we will be able to surpass the highest two-wheeler numbers of 18-19,” he said.

Rathee further explained that the company’s aftermarket business, which contributes around Rs 400 crore in revenue, will benefit significantly from the GST rate reduction.

“Our parts were initially all taxed at 28%. Now, all those parts that we supply to the independent aftermarket, which is a significant revenue segment for us, amounting to Rs 400 crores, will see the GST rate reduced from 28% to 18%. This will provide a very big boost to the independent aftermarket, where many grey market operators are active, even in safety-critical items like brakes,” the CMD added.

According to Rathee, GST reforms will be a game-changer for the economy. While US tariffs are anticipated to impact growth by 30-50 basis points, the GST reduction will boost consumption and is expected to increase the overall GDP by around 100 basis points, he said.

NDTV Profit earlier reported that the anticipated GST reforms will be announced around Navratri and are expected to boost festive demand.

On the impact of US tariffs on ASK Automotive, Rathee assured that the company’s limited export exposure means the tariffs will have minimal effect on their business.

“Our exports account for only 4.7%, with US exports around 3%. Another positive is that all our US exports are highly technical products that take time to develop. So, while it may impact demand, it will not affect pricing,” he explained.

On growth projections, Rathee clarified that the company expects mid-teens growth going forward, with EBITDA margins improving. The company is strategically reducing its wheel assembly business, which will help in sustainable growth.

“Excluding the wheel assembly, we have grown at 11.1%. So, against an industry growth of 0.7%, we have outgrown by 10%. I maintain that the company will continue growing in the mid-teens. Additionally, since the wheel assembly is being phased out, our Ebitda margins will increase,” he added.