Gst 2.0, festive question boost car outlook; Analysts reveal their top 3 automatic stock choices

The automotive sector of India started the festive season on a high note, which drove a strong moment of demand that came to the fore on the first day of Navratri on September 22. Furthermore stimulated by the GST 2.0 stealing of the government, which reduced taxes on passenger vehicles, the sector sees a revival in consumer representatives and footfalls over dealers.

This consumption -boost, in combination with the relaxation of interest rates and policy indicators, has encouraged analysts to be bullish on space, with Mahindra & Mahindra, Maruti Suzuki and Lumax Auto Technologies that pop up as top stock choices.

Brokerage companies and independent analysts see the festive season as a launch platform for Sustainable Momentum, with structural reforms and renewed national requirements that offer further thrust.

“The Indian Auto sector experiences a strong start of the party season, driven by the favorable Navratri kick -off and recent GST 2.0 rate reductions that reduced taxes on passenger vehicles,” said Saurabh Jain, head of fundamental research at SMC Global Securities, that this is further.

Furthermore, Choice Institutional Equits has upgraded its opinion about the automotive sector from ‘Neutral’ to ‘positive’, with reference to GST-conducted affordability, higher rural question and a strong start to the sale of Novratri.

“Our prospects for the automotive sector are positive, upgraded by neutral, powered by GST-taking cuts with effect from 22 September (Navratri Day 1), which will increase affordability and consumer sentiment,” said Chheda, employee at the company. Preferred Pick because of the wide exposure between vehicle segments. M&M, he notes, is a “broad beneficiary in PVs, CFS and tractors, with around 95% of his portfolio that benefits from GST-eating cuts.” Choice of institutional shares has a ‘buy’ rating on the shares with a target price of RS 4,450, which implies an advantage of 22.5%. Here are the shares that analysts recommend:

Mahindra & Mahindra

M&M remains a strong institutional interest in the field of Stellaire Q1 FY26 results. Saurabh Jain emphasizes that the company reported a turnover of 22% Jojsprong to RS 45,529 Crore, and Pat rose 24% JoJ to RS 4,083 Crore, thanks to the all -round performance in SUVs, tractors and LCVs.

Jain noted: “This combination of volume growth, market share profits, margin strength and EV -Dominance positions of M & M’s Autobedrijf as an attractive investment.”

The leadership of M&M in EVs also gives attention. The company has a turnover market share of 44.3% in e-SUVs and 40.9% in e-PVs, supported by a growing penetration rate. The market share of the tractor reached 45.2%, while SUV volumes rose by 22%, which emphasized the dominance of the company in both national and urban categories.

Maruti Suzuki

Maruti Suzuki also appears as a strong candidate this festive season, especially in the entry-level car segment. According to Saurabh Jain, the company “benefits from a recovery of the sale of entry level as a result of GST-driven price reductions, a strong appeal to buyers with a high income hit by upcoming changes in the wage committee, and the release of important models such as the Victoris SUV+ and Evitara.”

The margins are expected to improve with the increasing capacity use in the new operational Kharkhoda factory, while the company is also preparing for two large SUV launches in FY26.

Maruti’s export story also remains intact, whereby the export contributes 47% to the total sale of passenger vehicles and 37.4% JOJ in Q1 FY26, even if the domestic volumes fell slightly.

Lumax Auto Technologies

In the Auto Ancillaries Space, Lumax Auto Technologies (LMAX) attracted the attention of analysts for the focus on emerging mobility solutions. The company supplied a consolidated turnover of RS 1,026.4 CRORE in Q1 FY26 and a 30.7% Yoy win growth, supported by strategic acquisitions such as Greenfuel and the complete consolidation of IAC India. “Lmax’s focus on fast -growing, technology -driven segments, it positions it for sustainable growth in the developing mobility landscape,” said Chheda.

With a robust order book of RS 1500 Crore, of which about 10% is expected to be carried out in FY26, LMAX will offer visibility and implementation strength in the coming years. The brokerage has a ‘buy’ rating on the shares with a target price of RS 1,330, which implies an advantage of 14%.

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Prospect

With the festive season in full swing, persistent demand traction and supporting macro -economic policy such as GST speeds, analysts believe that car shares in FY26 can remain in focus. Although caution continues to exist around the disruptions of the supply chain because of geopolitical issues, the wider prospects remain optimistic.

As Jain notes: “The sector anticipates robust growth in the short term, especially in passenger vehicles”, although he adds that supply chain risks of worldwide events are paving the FY26 front views with “careful optimism”. Yet the road for India’s automotive sector for several triggers in the game – festive consumption, national recovery, EV penetration and favorable tax policy – seems to be the way for the Indian automotive sector.

(Disclaimer: recommendations, suggestions, views and opinions of the experts are their own. These do not represent the views of economic times)