Morgan Stanley mentioned that Mahindra & Mahindra (M&M), TVS Motor (TVSL), and Eicher Motors (EIM) were already gaining market share, and GST-led price reductions could accelerate this trend.
On stock calls, the brokerage has upgraded Eicher Motors to ‘Equalweight’ with a revised price target of ₹7,201, and Hero MotoCorp to ‘Equalweight’ with a price target of ₹5,968, as both benefit from two-wheeler recovery, but valuations look full and margin upside surprise is limited.
| Stock | Rating | Old Target (₹) | New Target (₹) |
| Maruti Suzuki | Overweight | 14,262 | 18,360 |
| Hyundai Motor India | Overweight | 2,241 | 3,066 |
| M&M | Overweight | 3,668 | 4,321 |
| Ashok Leyland | Overweight | 144 | 152 |
| Bajaj car | Underweight From Equalweight | 9,117 | 8,075 |
| Eicher Motors | Equalweight From Underweight | 4,079 | 7,201 |
| TVS Motor | Overweight | 3,126 | 3,933 |
| Hero Moto | Equalweight From Underweight | 3,765 | 5,968 |
However, it downgraded Bajaj Auto to ‘Underweight’, with a price target of ₹8,075, citing that the company stands to benefit the least from a domestic recovery on a relative basis.The brokerage further said that only 13% of households in India own passenger vehicles (PVs), while 73% own two-wheelers. It said price cuts would support both replacement demand and first-time buyer recovery.
First-time buyers are expected to be the key driver of PV demand, whereas replacement demand could play a larger role in boosting two-wheeler sales.Maruti Suzuki India, with new SUV launches and a recovery in first-time buyers, is expected to see market share gains, the brokerage said.
Automakers pass on GST cuts to consumers
Auto stocks, from Tata Motors to Mahindra & Mahindra, saw strong buying interest in Monday’s trade following GST rate cuts on several vehicle categories. The Nifty Auto index gained 2.5%, with 13 of its 15 constituents advancing. Key gainers included Bharat Forge and Ashok Leyland, both rising up to 6%.
Several manufacturers have announced price reductions, fully passing on GST benefits to customers:
Mahindra & Mahindra (M&M): Up to ₹1.56 lakh on models including Bolero, Scorpio, Thar Roxx, and XUV700 (effective September 6).
Tata Motors: Up to ₹1.55 lakh on passenger vehicles and up to ₹4.65 lakh on commercial vehicles (effective September 22).
Hyundai: Up to ₹2.40 lakh on models such as i20, Venue, Creta, Alcazar, and Tucson (effective September 22).
