Auto Sales Rise After GST Cut, But Most Stocks Still Remain In The Red
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Even though auto sales have improved after a reduction in GST rates, only four of 11 automakers have given positive stock returns in the last year.
According to a recent report, the automobile industry in India witnessed stronger sales as a result of lowered Goods and Services Tax (GST) rates. However, the rise in demand has not benefited the majority of auto stocks significantly.
Out of the 11 automotive companies, only 4 managed to have stock appreciation during the calendar year from September 22, 2025, to September 22, 2026. TVS Motor Company, Bajaj Auto, Eicher Motors and Ashok Leyland were among the stocks that gained during the period.
How Have Auto Stocks Performed Since The GST Cut?
On the National Stock Exchange (NSE), TVS share price gained 18% to ₹4,140.00 from ₹3,525 over the period. Bajaj Auto rose almost 26% to ₹11,363 from ₹9,055, while Eicher Motors increased 7% to ₹7,427 from ₹6,946.
Ashok Leyland gained 17% to ₹160.75 from ₹139. Tata Motors Commercial Vehicles, which was listed in November 2025, was one of the biggest gainers, up 34% to ₹440.1.
Some of the stocks that fell include Hero MotoCorp, which went down by 2.7%, and Maruti Suzuki, which fell 1%. Mahindra & Mahindra was off by 14.8%, and Tata Motors Passenger Vehicles was down by 1%. Hyundai Motor dropped by 18.9 % while Escorts fell by 23.5 %.
Why Did Only Some Auto Stocks Gain?
TVS Motor's returns were supported by strong electric vehicle and internal-combustion-engine scooter sales.
An increase in exports helped Bajaj Auto reduce the effect of the decline in the domestic market. On the other hand, the launch of Royal Enfield's lower-range Hunter model gave Eicher Motors a boost.
Ashok Leyland saw resilience in demand for medium and heavy commercial vehicles despite fuel price volatility.
What Is The Outlook For Auto Sector Sales?
Pricing pressure is still there in car sales and across passenger vehicle makers. Two-wheeler and truck manufacturers have already increased prices. For tractors, a higher base in the second half could limit growth after the strong performance recorded in fiscal 2026. The increase in the cost of raw materials due to geopolitical tensions is another factor that could affect margins across automakers.
The difference in performance among automotive stocks highlights the fact that even though GST reduction led to a rise in vehicle sales, the positive effect did not equally translate to stock gains in the automotive sector.
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This article is for informational purposes only and should not be considered investment advice from Kotak Neo. For compliance T&C and disclaimers, Visit www.kotakneo.com/disclaimer
Vishwa has spent 10+ years across fintech and FMCG doing what most people miss, connecting the dots, catching trends before they trend, and finding the angle nobody else thought to ask about.
At Kotak Neo, she drives content strategy for neoshorts, Kotak News Desk, and Investing Guide, turning market noise into something worth reading.
When she's not decoding markets, she trades charts for canvases, chasing art, painting, and architecture across cities she's yet to explore.
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