GST Rate Cut and Its Impact on M&M

GST Rate Cut Proposal: The Indian government is on the verge of reducing GST on cars, two-wheelers, three-wheelers, trucks, and buses from the current 28% down to 18%. The new recommendations seek to eliminate the 12% and 28% slabs, retaining only 5% (for essentials and EVs) and 18% for most internal combustion engine (ICE) vehicles. Luxury cars may have a new 40% bracket.

Projected Impact:
According to Nomura, this GST reduction could generate a “multiplier effect” on demand, resulting in a 10–15% increase in auto sales, with Mahindra & Mahindra and Maruti Suzuki positioned to benefit the most. Popular Mahindra models like the Bolero and XUV700 could see immediate price cuts (Bolero by approximately 10%, XUV700 by approximately 7%), thereby improving affordability and volume.
Anticipated margin improvement for OEMs like M&M could be as much as 1–1.5 percentage points if they maintain current discount structures after the tax cut; if the reductions are passed on, consumers benefit directly through price drops.

M&M Stock – GST Cue

GST Impact: The government is set to reduce GST on cars and SUVs from 28% to 18%, likely before Diwali 2025. This policy benefits Mahindra & Mahindra directly by lowering vehicle prices and potentially spurring demand.
Buying Price: M&M is consolidating near ₹3,375–₹3,385. Immediate supports are at ₹3,360 and ₹3,345—ideal zones for accumulation.
Target: With positive tax news and strong technical momentum, short- to medium-term upside targets are ₹3,500, ₹3,600, and possibly ₹4,000, if the uptrend continues

GST cuts are a strong fundamental trigger. Buying near ₹3,360–₹3,385 with a medium-term target of ₹3,500–₹3,600, and a stop loss below ₹3,320, is a favorable trading strategy for M&M amid these cues.

Disclaimer: lnkd.in/gJJDnvn2