Business
Tata Motors, Maruti, Ashok Leyland, Hero: In Auto Stocks Rally, Optimism Over PM Modi’s GST Move
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Shares of auto majors, including Hero MotoCorp, Maruti Suzuki India, Ashok Leyland, TVS Motor and Bajaj Auto, rally 5-8% amid expectations of a GST rate cut.
Tata Motors rose nearly 3% on Monday.
The domestic equity market surged on Monday following Prime Minister Narendra Modi’s announcement on GST reforms, S&P Global’s rating upgrade on India, and other positive global cues. While the benchmark indices, the BSE Sensex and the NSE Nifty, are up by over 1.3% each, the automobile stocks are fuelling the rally the most, with the Nifty Auto Index trading higher by an impressive 4.5%.
Shares of auto majors, including Hero MotoCorp, Maruti Suzuki India, Ashok Leyland, TVS Motor and Bajaj Auto, rallied 5-8% on Monday morning amid expectations that the GST rate on vehicles could be reduced from 28% to 18%.
Maruti Suzuki on August 18 hit its all-time high of Rs 14,048 apiece on the NSE, which is up nearly 8.7% compared with the previous close. Ashok Leyland was up by 7.7% at Rs 131.25, Hero MotoCorp was trading higher by 6.7% at Rs 5,024, TVS Motor Company rose 6.8% to Rs 3,226.8, Hyundai Motor India surged by 8.39% to Rs 2,428 apiece on the NSE.
Tata Motors also rose nearly 3% on Monday to Rs 685 in morning, while Mahindra & Mahindra was up by 4.5% at Rs 3,412. Bajaj Auto was trading higher by 3.7% at Rs 8,521.
Prime Minister Narendra Modi in his Independence Day Speech during the weekend announced a major overhaul in the Goods and Services Tax (GST) structure. Though he did not announce any details, reports said the Centre is considering scrapping the current 12% and 28% GST slabs, realigning most items into the 5% and 18% categories. Certain sin or luxury goods may be placed in a new 40% bracket.
The Centre is reportedly expected to lower the GST on passenger vehicles (PVs) and two-wheelers, enhancing their affordability quotient. Currently, two-wheelers are taxed at 28%. Analysts believe a cut to 18% is highly probable.
Brokerage Notes
Global brokerage firm Jefferies in its note said, “All the listed 2W OEMs – Bajaj, Hero, TVS, and Eicher – should benefit from this cut. We see a low probability of differential GST between entry-level and premium 2Ws.”
In passenger vehicles, small cars currently face an effective tax of 29-31% including compensation cess, making Maruti Suzuki one of the biggest potential beneficiaries of a rate cut. SUVs, however, are taxed at 45-50%, a rate Jefferies said is unlikely to change.
“Hybrid vehicles attract a similar GST rate as ICE vehicles, compared with 5% for EVs. Any reduction in GST on hybrids could be positive for Maruti,” the brokerage added.
Commercial vehicles, also taxed at 28%, may see a reduction to 18%. Ashok Leyland, along with Tata Motors and Eicher Motors, would be key gainers in such a scenario, Jefferies said.
Domestic brokerage firm Motilal Oswal Financial Services in its report on August 18 said automobiles will be one of the key segments that stand to benefit from GST rationalisation.
Passenger vehicle makers Maruti Suzuki and Tata Motors, currently paying 28% GST, are expected to benefit significantly if rates are lowered to 18%. Commercial vehicle maker Ashok Leyland may also see demand tailwinds as GST on trucks and buses comes down to 18% from the current 28%, said Motilal Oswal in the report.
Arun Agarwal, vice-president (fundamental research) of Kotak Securities, said, “The potential GST cuts for the automotive products to 18% would lower on-road prices across segments. We believe lower prices would stimulate demand recovery, and the impact would be more in the mass-market segment. Auto manufacturers (OEM) would gain from higher revenue and potentially higher margin, resulting in possible earnings upgrade.”
Auto ancillaries would also gain from the potential GST cut. However, the impact would vary depending on geographical exposure. Auto ancillary companies having higher revenue exposure in the domestic market stands to benefit more, whereas the gains for global suppliers would be lower given higher export exposure and tariff-related uncertainty, he added.
The government is reportedly planning to propose a simplified two-slab GST structure of 5% and 18%, replacing the current four-tier system of 5%, 12%, 18% and 28%.
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h…Read More
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h… Read More
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The Oil and Gas Regulatory Authority (OGRA) has approved a fresh increase in the price of liquefied petroleum gas (LPG), raising the cost for both domestic consumers and commercial users.
According to the notification issued, the LPG price has been increased by Rs7.39 per kilogram, setting the new rate at Rs209 per kg for December. As a result, the price of a domestic LPG cylinder has risen by Rs87.21, bringing the new price to Rs2,466.10.
In November, the price of LPG stood at Rs201 per kg, while the domestic cylinder was priced at Rs2,378.89.
The latest price hike is expected to put additional pressure on households already grappling with rising living costs nationwide.
Business
Private sector data: Over 2 lakh private companies closed in 5 years; govt flags monitoring for suspicious cases – The Times of India
NEW DELHI: The government on Monday said that over the past five years, more than two lakh private companies have been closed in India.According to data provided by Minister of State for Corporate Affairs Harsh Malhotra in a written reply to the Lok Sabha, a total of 2,04,268 private companies were shut down between 2020-21 and 2024-25 due to amalgamation, conversion, dissolution or being struck off from official records under the Companies Act, 2013.Regarding the rehabilitation of employees from these closed companies, the minister said there is currently no proposal before the government, as reported by PTI. In the same period, 1,85,350 companies were officially removed from government records, including 8,648 entities struck off till July 16 this fiscal year. Companies can be removed from records if they are inactive for long periods or voluntarily after fulfilling regulatory requirements.On queries about shell companies and their potential use in money laundering, Malhotra highlighted that the term “shell company” is not defined under the Companies Act, 2013. However, he added that whenever suspicious instances are reported, they are shared with other government agencies such as the Enforcement Directorate and the Income Tax Department for monitoring.A major push to remove inactive companies took place in 2022-23, when 82,125 companies were struck off during a strike-off drive by the corporate affairs ministry.The minister also highlighted the government’s broader policy to simplify and rationalize the tax system. “It is the stated policy of the government to gradually phase out exemptions and deductions while rationalising tax rates to create a simple, transparent, and equitable tax regime,” he said. He added that several reforms have been undertaken to promote investment and ease of doing business, including substantial reductions in corporate tax rates for existing and new domestic companies.
Pakistan’s textile exports surged to $6.4 billion during the first four months of the 2025-26 fiscal year, marking the highest trade volume for the sector in this period.
According to the Pakistan Bureau of Statistics (PBS), value-added textile sectors were key contributors to the growth.
Knitwear exports reached $1.9 billion, while ready-made garments contributed $1.4 billion.
Significant increases were observed across several commodities: cotton yarn exports rose 7.74% to $238.9 million, and raw cotton exports jumped 100%, reaching $2.6 million from zero exports the previous year.
Other notable gains included tents, canvas, and tarpaulins, up 32.34% to $53.48 million, while ready-made garments increased 5.11% to $1.43 billion.
Exports of made-up textile articles, excluding towels and bedwear, rose 4.17%, totaling $274.75 million.
The report also mentioned that the growth in textile exports is a result of improved global demand and stability in the value of the Pakistani rupee.
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OGRA Announces LPG Price Increase for December – SUCH TV
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