On February 01, the share price of Maruti Suzuki was trading 2% lower before the Union Finance Minister presented the Budget 2025 in the Lok Sabha. However, the stock closed the session almost 5% higher on the National Stock Exchange. But what led to this spark in the auto companies’ stock prices?
Well, it was not just Maruti Suzuki that ended higher on February 01. Auto stocks overall surged higher after FM Nirmala Sitharaman announced custom duty cuts on lithium-ion batteries, reducing import duties on essential battery production equipment, and other important minerals necessary for the auto industry that will bring down the EV battery cost.
Following this, the stocks of auto companies like Hyundai Motor India, Eicher Motors, Bajaj Auto, TVS Motor, and others clocked smart gains. The Nifty Auto closed the session 1.9% higher at 23,305.45. Maruti Suzuki and Eicher Motors were one of the top gainers in the Nifty 50.
“Lower import costs will make EVs more affordable, while investments in domestic mineral exploration, battery manufacturing, and electrolyte production will drive long-term self-reliance. These initiatives will reduce supply chain vulnerabilities and accelerate India’s shift to clean mobility,” said Saket Mehra, Partner and Auto & EV Industry Leader at Grant Thornton Bharat.
“The specific focus on rural prosperity and agriculture, coupled with reforms in the personal income tax, is likely to have a positive effect on the auto industry, and will help in creating demand,” said Shailesh Chandra, President at SIAM. “Furthermore, the exemption of critical minerals (e.g. Cobalt, Lead, Zinc etc.), scraps of Lithium-ion battery, and 35 additional capital goods from customs duty will help create a strong EV ecosystem in the country.”
Adding to the excitement, monthly auto sales data buoyed the auto stock further. Mahindra & Mahindra ended the day 2.7% higher at Rs 3,069.85 after its domestic tractor sales for January jumped 15% year-on-year (YoY) to 26,305 units, with overall sales growth of 15% YoY.
The experts added that it was not just the boost to EVs and batteries, but the push towards consumption by leaving more disposable income also helped in it. “We commend the 2025 Union Budget for its continued support of robust consumption growth through changes in the tax structure,
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