Indian auto stocks are outperforming their Asian counterparts this month by the greatest margin in over a year, with analysts forecasting continued gains due to tax cuts stimulating demand.
The Nifty Auto Index has risen by 8.5% this month, compared to a 1% increase for Asian peers tracked by the Bloomberg Intelligence Index and a 2.6% rise in the main NSE Nifty 50 Index. Investment firms such as Goldman Sachs Group, Jefferies Financial Group Inc, and Morgan Stanley have all upgraded their recommendations for several domestic automakers in September.
Jimeet Modi, founder of Mumbai-based wealth management firm Samco Group, remarked, “We’re at the beginning of a new auto cycle, and it typically lasts for a good 24 to 36 months. The next leg will come once the numbers actually start flowing in.”
The Indian government has reduced the goods and services tax on most passenger vehicles to 18% from rates as high as 31%, enhancing affordability for millions of consumers ahead of the annual festival season that commenced this week.
Maruti Suzuki India Ltd, the country’s largest car manufacturer, has seen its stock rise over 25% since August 15, when Prime Minister Narendra Modi announced a plan to overhaul the consumption tax structure. This rally has increased the company’s market value to $57 billion, positioning it close to global rivals General Motors Co and Mercedes-Benz Group AG.
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Published on September 24, 2025.
