Mahindra & Mahindra rallies for second straight session, hits 52-week high; here is why

The changes in the goods and services (GST) tax structure are expected to boost consumption massively and benefit sectors including automobiles.

The GST Council on September 3 cleared proposed changes to the indirect tax regime, approving an overhaul of rates by limiting slabs to 5% and 18%, effective from September 22, 2025, the first day of Navaratri.

Reacting to the GST Council's decision to overhaul the tangled GST, Mahindra Group CEO & MD Anish Shah has said that the group views these reforms as transformative, as it simplifies compliance, expands affordability, and energises consumption, while enabling industry to invest with greater confidence.

"The next-generation GST reforms announced today mark a defining moment in India's journey towards building a simpler, fairer, and more inclusive tax system," he said in a statement.

Shah further said by moving to a streamlined two-rate structure and focusing on essentials that touch the lives of every citizen—from food, health, and insurance to agriculture and small businesses—the government has “reaffirmed its commitment to ease of living and ease of doing business.”

At the consolidated level, M&M’s passenger vehicle or automotive segment contributes 57% of the total revenue. In Q1 FY26, the automotive segment revenue stood at ₹25,999 crore, up by 31% on a year-on-year basis. Primarily, M&M's strength lies in large cars and SUVs, in which it has a bigger share of the total industry. Hence, the new GST benefit for cars below 1200 cc and 4000 mm engine displacement is very minimal.

However, with the abolishment of additional cess on the high-end luxury cars, large cars and SUVs, the new GST rate of 40% is less than the previous effective GST rate of 50%, which included additional cess. In addition, the company’s increased EV portfolio will also prove to be beneficial as it attracts only 5% GST and no additional cess.

At 2 PM, shares of Mahindra & Mahindra were trading at ₹3,571.10 apiece on the National Stock Exchange, rising 2.57%. It was one of the most contributing stocks on the NIFTY50 index.

Over the last five trading sessions, shares of the auto firm have surged 11.5%, while for a six-month period, they have zoomed 31%. From the beginning of the year, M&M shares have climbed 16%.

The company’s market capitalisation stands at ₹4.28 lakh crore.

For petrol, LPG and CNG vehicles of less than 1,200 cc and not more than 4,000 mm in length and diesel vehicles of up to 1,500 cc and 4,000 mm in length would move to the 18% rate from the current 28%.

All automobiles above 1,200 cc and longer than 4,000 mm, as well as motorcycles above 350 cc and racing cars, will be charged with a 40% levy. Small hybrid cars will also benefit, while EVs will continue to be charged at 5%.

GST on tractors with engines less than 1800 cc has been reduced from 12% to 5%. Road tractors for semi-trailers (engine capacity more than 1800 cc) have been lowered from 28% to 18%.

Meanwhile, GST on most of the components used for making cars and motorbikes has also been reduced to 18%.