Maruti Shares Jump Most in 5 Years on GST Cut Hopes
Maruti Suzuki India shares surged nearly 8%, recording their biggest single-day gain in almost five years. The rise followed government proposals to reduce GST on small cars from 28% to 18%, sparking investor optimism across the auto sector.
Tax Reform Trigger
The government recently announced a move to simplify the Goods and Services Tax (GST) structure. The plan includes reducing slabs and shifting to a more streamlined system. Small petrol and diesel cars, which currently face a high tax burden, are expected to benefit most from this decision.
Impact on Auto Industry
The news triggered a strong rally in the automobile sector. Auto and consumer goods companies led the market uptrend, with both carmakers and two-wheeler manufacturers gaining. Analysts noted that such tax reforms could stimulate demand, particularly in the entry-level car segment.
Why Maruti Gains the Most
Maruti Suzuki is positioned as the largest beneficiary of the GST change. Small cars make up nearly half of its sales, though its overall market share has declined in recent years. The tax cut is expected to improve affordability and boost sales volumes, helping the company regain momentum in the competitive market.
Industry Response
Maruti Suzuki’s chairman welcomed the move, calling it a “huge reform” that could enhance India’s competitiveness in auto manufacturing. Market experts predict a 15–20% rise in demand if the new GST structure is implemented, giving the sector a major boost.
