GST cut boost: Our top-rated auto stocks that can gain

Summary: The GST cuts are expected to boost festive demand for a number of consumer goods, including discretionary segments like automobiles. Out of dozens of listed auto firms, only four companies have a flawless 5-star Value Research Rating and might gain big from the likely demand offtake in the coming festive season. Find their names in the story below.

The GST tax overhaul, effective September 22, 2025, has trimmed the old four-tier structure into just two slabs—5 per cent and 18 per cent—while introducing a new 40 per cent bracket for luxury and “sin” goods. The cut is expected to lower pricing across consumer staples, durables and discretionary segments like automobiles.

Small cars and motorcycles will now attract 18 per cent tax instead of 28 per cent. Commercial vehicles, tractors and auto parts also move to the 18 per cent bracket. With these cuts coinciding with the festive season, demand tailwinds for the auto sector look stronger than ever.

Top-rated auto stocks to watch

Against this backdrop, we spotlight four auto stocks—three large caps and one small-cap—that have a perfect 5/5 score in Value Research Stock Ratings. Their sterling ratings reflect a rare combination of financial solidity, valuation attractiveness (measured by metrics beyond P/E), growth consistency and market momentum.

1) Eicher Motors: Known for its premium motorcycle franchise, Eicher stands to benefit as the mid-segment moves to a lower GST slab, making its offerings more affordable. The company’s strong brand equity, disciplined capital allocation and clean balance sheet have long set it apart as a quality player in the auto space.

2) Hero MotoCorp: As the dominant force in commuter bikes, Hero is likely to see the most direct boost from the GST cut on entry-level two-wheelers. With an expansive rural reach and a long record of profitability, the company remains a solid bellwether for mass-market two-wheeler demand.

3) Maruti Suzuki India: Small cars remain Maruti’s core strength, and the GST reduction lands squarely in its sweet spot. The company has historically married scale with efficiency, making it well placed to capture affordable buyer demand.

4) V.S.T. Tillers Tractors: A niche but important player in farm equipment, VST could gain as tractors and power tillers become more cost-effective. Despite its smaller size, the company has carved a reputation for prudent management and steady growth in a sector closely tied to rural consumption.

Which auto stocks deserve a place in your portfolio?

The GST rate cuts are expected to lift demand and sales momentum for auto companies in the coming quarters. But stock-picking requires more than just looking at short-term tailwinds.

For companies that actually deserve a place in your portfolio for the long haul, our analysts at Value Research Stock Advisor have picked four auto players for our buy recommendations, carefully chosen for their ability to capture the sector’s next big upcycle. If you want to go beyond ratings and discover actionable opportunities, that’s where you’ll find them.

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Also read: GST reform looms, markets eye the winners