Hyundai Motor India, one of many nation’s main passenger automobile makers, noticed its shares surge 10% in intraday commerce on Monday, August 18, hitting a contemporary all-time excessive of ₹2,464 apiece. As we speak’s rally additionally marked the most important single day soar for the inventory since its itemizing in October 2024.
The surge got here amid broad-based shopping for throughout auto shares after the Indian authorities proposed decreasing the GST charge on cars to 18% from the present 28%. Analysts imagine the transfer might result in decrease costs and probably revive gross sales, which have been below stress in latest quarters because of weak city consumption demand.
To offset sluggish home gross sales, firms like Hyundai Motor have more and more turned to exports to maintain progress. Nevertheless, the proposed GST minimize got here as well timed aid, particularly after Indian auto exports to the US had been not too long ago hit with a 50% tariff.
The proposed tax reforms additionally come simply forward of the festive season, a vital interval for auto gross sales in India. The federal government has been taking important measures to revive home consumption, with the proposed GST reforms following earlier Union Funds measures corresponding to earnings tax cuts.
Prime Minister Narendra Modi, in his Independence Day tackle, introduced “GST Reforms 2.0,” geared toward rationalizing charges into two slabs versus the prevailing 4 (excluding sin items).
“Autos fall below the 28% GST bracket. If autos transfer to 18% and we see sharp worth drops, this might drive the subsequent auto upcycle, much like 2008,” stated Morgan Stanley.
“Presently, GST on passenger automobiles ranges from 29% to 50%, as a cess is imposed on prime of GST primarily based on the automobile’s dimension and engine capability. Within the new regime, the federal government could scale back the tax on smaller automobiles to 18% (from 28%) and transfer greater automobiles to a ‘particular charge’ of 40% whereas scrapping the cess. This might decrease costs of smaller automobiles by round 8% and bigger automobiles by 3–5%,” stated HSBC.
Home brokerage Motilal Oswal added that just about 99% of products at the moment within the 12% slab (customary items) could also be shifted to the 5% slab, decreasing retail costs by 4–5% and easing family budgets. Equally, 90% of products within the 28% slab are prone to transfer to 18%, additional boosting consumption.
The proposals and finer particulars are prone to be authorized by the GST Council in early 3QFY26. The Finance Ministry has indicated a ₹500 billion affect on tax income, which seems manageable, stated the brokerage.
Hyundai Motor India share worth development
The inventory, which made its debut on the Indian inventory market in October 2024, stayed largely inactive for almost seven months earlier than gaining momentum in Might.
This rally continued within the subsequent months, permitting it to cross its IPO worth of ₹1,960 for the primary time in early June, a stage it has held since. At present ranges, the inventory is buying and selling 26% greater than its IPO worth.
The bullish momentum in Hyundai Motor’s share worth is being supported by robust technical indicators, constructive outlooks from main brokerages, and enhancing sentiment within the broader Indian market.
Collectively, these elements have helped the inventory escape of its consolidation section, delivering stable returns to IPO buyers who remained invested.
Disclaimer: This story is for academic functions solely. The views and suggestions made above are these of particular person analysts or broking firms, and never of Mint. We advise buyers to test with licensed consultants earlier than making any funding choices.
