Auto stocks rev up but selectively on excise duty cut

A slew of excise duty concessions on a range of automobile products revved up the auto stocks, but selectively.

The relief was skewed in favour of certain products — small cars, SUVs and mid-sized cars and two-wheelers — and the rally in auto stocks reflected the strength of auto companies relating to the product segments that would benefit from the duty relief.

Finance Minister P Chidambaram has announced reduction in excise duty on small cars and two-wheelers from 12 per cent to 8 per cent, on SUVs from 30 per cent to 24 per cent and mid-size cars from 24 per cent to 20 per cent.

In terms of value, among the CNX Auto index stocks, Hero MotoCorp gained the most by Rs 36.30 to Rs 1973.60. Maruti shares jumped by Rs 12.60 to Rs 1,656 and M&M was up by Rs 7.50 to Rs 911.90. Eicher Motors gained by Rs 50.50 to trade at Rs 4,900. TVS Motor Co (not in CNX Auto index) was up by Rs 1.55 at Rs 81.85.

However, companies that derive significant income from heavy vehicle sales did not gain anything. Tata Motors was down by Rs 1.60 to trade at Rs 387.20 and Ashok Leyland was trading flat at Rs 15.60. Two-wheeler major Bajaj Auto shares were down by Rs 6.60 to Rs 1,833.