Four-wheeler auto stocks are racing ahead on Dalal Street and that’s thanks to a pick-up in demand in the festive season currently underway coupled with changes in GST rates on vehicles in this segment.
It was no surprise that Maruti Suzuki India ended Friday trade broadly flat at Rs 16,266.7 on Friday and not too far from its 52-week high of Rs 16,438 that was reached during intra-day trading. Similarly, Mahindra and Mahindra fell 3.7% on Friday to Rs 3,397.2 on Friday and it ended not too far from its 52-week high of Rs 3,723 that was reached on 9 September 2025.
And Hyundai Motor India, which was listed on local bourses in late October 2024, also ended 3.3% lower at Rs 2,637.3 on Friday and not too from its 52-week high of Rs 2,889.65 that was reached on 22 September 2025.
The automobile industry will release sales figures for September 2025 on Wednesday. However, senior officials of Federation of Automobile Dealers Associations (FADA) in media interactions have pointed out that that they expect vehicles sales to rise 10-15 % in the current festive season compared to the sluggish single digit growth witnessed for the broader four-wheeler industry from April till August in the current financial year.
Two roads diverge: Small cars vs. SUVs
Maruti Suzuki, the largest player in the domestic 4-wheeler market, saw vehicle sales grow barely 1.2 % y-o-y to 889,070 units during April till August of current financial year. And in the case of Mahindra & Mahindra, a leading player in the SUV segment, its total vehicle sales grew 15% y-o-y to 241,337 units during April till August of FY26.
The new GST structure that came into effect on September 22 has added to the buoyancy in investor sentiment – cars with an engine capacity of less than 1200 cc, the GST has been reduced to 18% from 28%. The GST on large cars has been rationalised to flat 40% (with no cess).
Gearing up for competition
The locally listed players have launched several car models over the past few months at a time when global four-wheeler players are entering the Indian market. Tesla entered the local market with the launch of its local showroom in mid-July for its electric vehicle Model Y, priced at nearly Rs 60 lakh.
And Vietnam-based Vinfast, entered the local market with premium electric SUVs, the VF 6 and VF 7. These are priced starting Rs 16.5 lakh.
To deal with the above competition, Maruti Suzuki, has recently launched its latest SUV Victoris, which has a starting price of Rs 10.49 lakh. In addition, in August 2025, Maruti Suzuki had unveiled the Grand Vitara Phantom Blaq Edition.
They are not alone. Mahindra and Mahindra, in mid-August 2025, unveiled its new modular, multi-energy NU_IQ platform, with four SUV concepts – the Vision.S, Vision.T, Vision.SXT and Vision.X.
This Mumbai-based player had also introduced BE 6 Batman Edition — a limited-run electric origin SUV.
The financial divide: Stagnation vs. surging profits
Maruti Suzuki’s standalone revenue from operations grew 8.1 % y-o-y to Rs 38,414 crore in the June 2025 quarter while its net profit rose 1.7 % y-o-y to Rs 3,712 crore.
Meanwhile, Mahindra & Mahindra’s standalone revenue from operations grew 26.1% y-o-y to Rs 34,083 crore in the June 2025 quarter, while its net profit rose 32% y-o-y to Rs 3,450 crore.
The valuation question
Maruti Suzuki trades at a P/E of nearly 33 times estimated standalone FY26 earnings.
And Mahindra & Mahindra trades at a P/E of nearly 28 times estimated standalone FY26 earnings. Hyundai Motor India also trades at nearly 40 times estimated standalone FY26 earnings.
However, Tata Motors trades at a P/E of just 13 times estimated consolidated FY26 earnings. Among other challenges, which including a corporate demerger, the company is dealing with current operational problems at its key UK-based JLR business.
Apart from Tata Motors, the other three four-wheeler players’ stock price broadly factors in the growth opportunities in the short-term. It remains to be seen if there is further upside from here. Or is all the good news already factored into the price.
Amriteshwar Mathur is a financial journalist with over 20 years of experience.
Disclosure: The writer and his family have no shareholding in any of the stocks mentioned in the article.
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