The GST Council has raised the Goods and Services Tax (GST) on old and used vehicles from 12 percent to 18 percent. This increase applies to businesses selling these vehicles at a margin and claiming depreciation, while individual transactions remain taxed at the lower 12 percent rate. The hike covers all used vehicles, including electric ones, previously taxed at 12 percent. Analysts warn that the higher GST may impact demand in the used vehicle market, particularly affecting electric vehicle sales. Additionally, businesses in the sector could face rising operational costs due to increased taxes on repairs and maintenance.
Listed below are some of the stocks that might be affected by the GST increase on used cars from 12% to 18%.
CarTrade Tech
CarTrade Tech is an Indian online automotive platform that facilitates the buying and selling of new and used vehicles. They operate multiple brands which include CarWale and Shriram Automall while connecting consumers, dealers, and OEMs through a comprehensive marketplace. Their business model includes B2C and B2B services, offering vehicle listings, financing, and inspection services.
With a market capitalization of Rs. 7,401 Crores, the shares of CarTrade Tech Limited closed at Rs. 1,564 per equity share, down 3.28 percent from its previous day’s close price of Rs. 1,618.
Its Revenue from operations increased by 28 percent from Rs. 120 Crores in Q2FY24 to Rs. 154 Crores in Q2FY25, accompanied by profits of Rs. 5 Crores to Rs. 31 Crores.
Popular Vehicles and Services
Popular Vehicles & Services, part of the Kuttukaran Group, operates multi-brand automobile dealerships across Kerala, Tamil Nadu, and Karnataka. Their business model includes new and pre-owned vehicle sales, servicing, and financing.
With a market capitalization of Rs. 1,147.36 Crores, the shares of Popular Vehicles and Services Limited closed at Rs. 161.15 per equity share, down 1.44 percent from its previous day’s close price of Rs. 163.50.
Its Revenue from operations declined by 7 percent from Rs. 1,628.96 Crores in Q2FY24 to Rs. 1,512.75 Crores in Q2FY25, accompanied by profits of Rs. 32.29 Crores to Rs. 7.57 Crores.
Landmark Cars
Landmark Cars Limited is a leading Indian automotive retailer, authorized for brands like Mercedes-Benz, Honda, and Volkswagen. Their business model focuses on new and pre-owned vehicle sales, after-sales services, and financing options. With 129 outlets across India, it focuses on providing a comprehensive automotive experience, enhancing customer engagement and retention.
With a market capitalization of Rs. 2,549.29 Crores, the shares of Landmark Cars Limited closed at Rs. 616.80 per equity share, down 2.78 percent from its previous day’s close price of Rs. 634.45.
Its Revenue from operations grew by 18 percent from Rs. 770.69 Crores in Q2FY24 to Rs. 907.27 Crores in Q2FY25, accompanied by a profit of Rs. 20.50 Crores to Rs. 0.34 Crores.
Maruti Suzuki India
Maruti Suzuki India Limited, established in 1981, is India’s largest passenger car manufacturer, holding over 44% market share. Their business model includes manufacturing and selling a wide range of vehicles, facilitating pre-owned car sales through Maruti True Value, and offering financing and after-sales services, enhancing customer accessibility.
With a market capitalization of Rs. 3,39,806.30 Crores, the shares of Maruti Suzuki India Limited closed at Rs. 10,808 per equity share, down 0.89 percent from its previous day’s close price of Rs. 10,904.75.
Its Revenue from operations improved by 0.29 percent from Rs. 37,339 Crores in Q2FY24 to Rs. 37,449 Crores in Q2FY25, accompanied by a profit of Rs. 3,786 Crores to Rs. 3,102 Crores.
Written by Santhosh S
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