Hero MotoCorp, Maruti Suzuki, Bajaj Auto Spike As Auto Stocks Buzz On GST Rate Cut Anticipation
Auto stocks including those of Hero MotoCorp Ltd., Maruti Suzuki Ltd., Bajaj Auto Ltd. rose on Monday on expectations of a likely rate cut in GST.
Auto stocks including those of Hero MotoCorp Ltd., Maruti Suzuki Ltd., Bajaj Auto Ltd. rose on Monday on expectations of a likely rate cut in GST.
The Centre is considering a major overhaul in the GST structure for automobiles, proposing a new categorisation based on engine capacity rather than vehicle type. This could pave the way for lower tax rates on small cars, NDTV Profit reported on Sunday.
Hero MotoCorp gained as much as 8.73% to trade at Rs 5,119 apiece, followed by Maruti Suzuki which gained as much as 8.15% to trade at Rs 13,990 apiece.
The third biggest gainer for the day was Bajaj Auto which gained as much as 5.06% to trade at Rs 8,629.50 and TVS Motor spiked as much as 6.54% apiece to trade at Rs 3,217.70 per share.
Prime Minister Narendra Modi, in his address to the nation on the occasion of India's 79th Independence Day, announced a proposal for major revamp of the GST regime.
The government is reportedly considering lowering the GST rate from 28% to 18% for two-wheelers, motorcycles under 250cc, and cars with engines smaller than 1.2 liters. This move would directly benefit companies like Hero MotoCorp, Bajaj Auto, TVS Motor, and Maruti Suzuki, which have a strong presence in these segments.
A lower tax rate would make these vehicles more affordable, potentially spurring sales and improving margins.
