HSBC has said that the recent GST rationalisation for automobiles is likely to accelerate sector growth, boosting the compound annual growth rate (CAGR) of the segment by 200–300 basis points over the next four to five years. The brokerage noted that auto stocks have already rallied between 6% and 17% since the August 15 tax revisions and are now expected to track stronger earnings growth.
HSBC expects growth to be front-loaded, raising its FY27–28 earnings per share (EPS) estimates across auto companies by 4–14%. Among its top picks, the brokerage maintained buy ratings on Maruti Suzuki with a target price of ₹17,000, Hyundai Motor India at ₹2,800, TVS Motor Company at ₹4,000, Mahindra & Mahindra at ₹4,000, and Ather Energy at ₹600.
It said the combination of GST-led price reductions, monetary easing, and supportive consumer income dynamics should create one of the most favourable demand environments in recent years. HSBC added that the auto sector remains one of the strongest structural plays in India’s consumption growth story.
Disclaimer: The views and recommendations made in this article are those of HSBC. This article does not constitute investment advice. Investors should consult their financial advisors before making any investment decisions.
