M&M Stock Jumps 8% on GST Reforms: SUVs, Tractors to Get Cheaper

Shares of automobile giant Mahindra & Mahindra Limited (M&M) jumped up to 8% on Thursday (September 4), emerging as the top gainer on the Nifty 50 index. The rally followed the GST Council’s announcement of two primary tax slabs — 5% and 18%.

With the GST Council approving a 40% tax rate on higher-end SUVs, the overall tax incidence is now lower than before. Under the existing system, premium SUVs attracted 28% GST plus up to 22% compensation cess — raising the effective tax burden to 43–50%. Under the revised framework, about 40% of M&M’s SUV portfolio will now fall under the 18% slab, while the rest will face lower rates than the current structure.

Reports suggest nearly 60% of M&M’s overall auto volumes, including commercial vehicles, will be taxed at 18%. The company’s tractors — contributing 30% of revenue — will move to the 5% slab from the earlier 12%. Tractor parts too will now attract just 5%.

This rally comes at a time when M&M stock has lagged behind peers in 2025, gaining only 9% so far compared to Maruti Suzuki’s 40%. Following the tax reforms, M&M announced that the entire benefit will be passed on to customers.

“This will bring down tractor prices by ₹40,000 to ₹60,000 depending on the horsepower category,” said Rajesh Jejurikar, Executive Director and CEO – Auto & Farm Sector, M&M. The company sells around 35,000–40,000 tractors each month.

“Overall, excluding the 40%, we have a significant chunk of volumes including pickups and SUVs in the 18% slab, and tractors and EVs in the 5% slab,” he added.

However, the company does not foresee immediate festive season gains. “There is limited time to capture the upside during this festive period. We are barely 20 days away… Increasing capacity or output isn’t possible,” Jejurikar noted.

Some buyers may also delay purchases until the new rates kick in on September 22, which could impact September volumes.

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