Auto ancillary, tyre stocks gain momentum after GST cut: Balkrishna Industries, JK Tyre, Sona BLW zoom

Shares of auto ancillary and tyre companies were trading higher on Thursday, September 4, after the GST council announced a tax reduction on auto components to 18% from the current 28%.

The auto sector, which is undergoing a structural slowdown, is likely to benefit the most from the new GST rates approved by the GST Council.

Nifty Auto is up over 2% in early trade, with auto ancillary and tyre stocks like Bosch, MRF and Balkrishna Industries trading with major gains.

Shares of Samvardhana Motherson were trading 0.12% higher at ₹96.62 apiece on the NSE, and Sandhar Technologies was up 0.36% at ₹471.15. Sona BLW Precision Forgings was trading 0.42% higher at ₹451.90 on the NSE. Meanwhile, auto components and equipment firm Bosch was trading at ₹41,305 apiece, rising 0.43%.

Tyre stocks like MRF (0.72%), Balkrishna Industries (1%), JK Tyre & Industries (1.86%), TVS Srichakra (0.31%), and Tube Investments of India (0.84%) were seen higher on Thursday.

Commenting on the rate cut, Automotive Component Manufacturers Association of India (ACMA) DG Vinnie Mehta has said, “ACMA welcomes the government's decision to bring all auto components under a uniform 18% GST slab—a long-standing recommendation of the industry. This landmark reform will help curb the grey market, ease compliance, support MSMEs, and enhance the global competitiveness and resilience of India's automotive component industry.”

“The move makes tractors and farm machinery more affordable for farmers, reduces costs for commercial vehicles and improves accessibility for personal mobility through rationalisation of rates across all SUVs. Together, these measures are expected to stimulate demand and drive inclusive growth across the entire ecosystem,” Rajesh Jejurikar, ED & CEO—Auto and Farm Sector, M&M, said.

The continuation of the 5% GST rate on EVs is a critical enabler of India’s clean mobility vision. This measure will further accelerate the adoption of electric vehicles and reinforce India’s leadership in sustainable, green transportation, Jejurikar said.