Tata Motors, M&M, other auto stocks rise up to 6% amid price cuts by some automakers, BofA upgrades

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26 Aug, 2025 12:21

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Auto stocks surged on September 8 after some automakers announced strong price cuts after the GST Council decided to reduced taxes on several vehicles. The sharp rise in the share prices pushed the Nifty Auto index up more than 3 percent.

The auto index rose to 27,189.20, emerging as the top sectoral gainer on the stock market today. The index is currently nearing its all time high level. Bharat Forge and Ashok Leyland shares lead the gains, rising around 6 percent and over 5 percent respectively.

Bank of America (BofA) has increased the target prices of several auto stocks, anticipating sharp upside potential after the latest GST cuts.

Tata Motors shares jumped more than 4 percent to trade at Rs 721.10 apiece. The company on September 5 said that it will pass on the full benefits of the recent GST rate reduction to customers across its cars and SUVs, with price cuts of up to Rs 1.55 lakh effective September 22.

Mahindra & Mahindra (M&M) shares jumped more than 4 percent to trade at Rs 3,704.20 apiece. The company also had announced that it will fully pass on the GST 2.0 benefits to customers across its ICE SUV portfolio with immediate effect. As a reduction in GST, M&M's popular models like the Thar, Scorpio, Bolero, XUV700, and Scorpio-N will now be available with substantial savings ranging from Rs 1.01 lakh to Rs 1.56 lakh, depending on the model and variant.

BofA increased its target price for M&M to Rs 4,000 per share, from Rs 3,750 per share, while keeping its 'Buy' rating on the stock, according to the brokerage note cited by NDTV Profit. The latest target price implies an upside potential of more than 12 percent over the stock's previous closing price of Rs 3,561.30 per share.

Samvardhana Motherson and Bajaj Auto shares gained more than 4 percent, while TVS Motors shares were up around 3 percent. Hero Moto Corp shares closed over 1 percent higher. For the two-wheeler makers too, BofA has increased the target prices, while remaining 'Neutral'. For Bajaj Auto, the international brokerage increased the target price to Rs 9,600 apiece, while for TVS Motors, it increased the target price to Rs 3,725 apiece, according to the brokerage note cited by NDTV Profit. Hero MotoCorp's price target was increased to Rs 5,650 apiece.

Maruti Suzuki shares gained over 2 percent. While the company has not announced price cuts yet, its Chairman RC Bhargava in an interview with Financial Express hinted at strong reduction in car prices. He told the publication that the price of Alto could drop by Rs 45,000, while the WagonR may see price cuts between Rs 60,000 and Rs 70,000.

BofA has increased the target price for the stock to Rs 17,000 per share, from Rs 14,000 per share, and has maintained its 'Buy' rating on the stock, according to the brokerage note cited by NDTV Profit.

ICICI Securities has a 'Buy' call on Maruti Suzuki, and increased its target price to Rs 17,000 per share. This implies an upside potential of more than 14 percent from the stock's previous closing price of Rs 14,895 per share. "The recent reduction in GST rates from 28% to 18% across most segments in the auto sector may inject fresh demand momentum. This is in addition to the recent rationalisation of personal income tax slabs, interest rate cuts and the upcoming Pay Commission revisions. These factors are expected to increase affordability and stimulate demand, addressing the industry's challenges of muted sales, especially in the entry level segment," the domestic brokerage said.

Eicher Motors shares meanwhile were trading more than 3 percent higher. BofA has increased its target price for the stock to Rs 7,500 apiece, implying an upside potential of nearly 14 percent from the stock's previous closing price.

Hyundai Motor India, which is not a part of the Nifty Auto index, closed in the green with marginal gains. Bosch and Balkrishna Industries shares were up around 1 percent each.

Also read: Our LIVE blog on stock market updates

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