GST-Led Price Cut: Bajaj Auto Set For Higher Sales Momentum, Technicals Support Rally

Bajaj Auto announced a price cut across its Bajaj and KTM motorcycle as well as the three-wheeler range after the Indian government reduced GST on sub-350 cc two-wheelers. The move will take effect from September 22.

Bajaj announced price reductions of up to ₹20,000 on motorcycles and up to ₹24,000 on three-wheelers. The automaker will be entirely passing on the benefits of the government's tax change, it said in a press release after market hours on Tuesday.

The majority of the two-wheeler models manufactured by Bajaj are in the sub-350 cc category, except a few KTM 390 cc models and the 400 cc Dominar. Bajaj also manufactures 400cc Triumph motorcycles in India.

Separately, Eicher Motors announced that its Royal Enfield brand will pass on the full GST rate reduction to customers, making its 350cc motorcycles cheaper by up to ₹22,000, with revised prices across motorcycles, services, apparel, and accessories effective from September 22.

Analyst Take

The price cuts from Bajaj Auto are set to benefit a wide range of customers. Daily commuters who rely on two-wheelers for affordable mobility, and small business owners using three-wheelers for work, will see meaningful savings, said SEBI-registered analyst Mayank Singh Chandel.

With the festive season approaching, these cuts could provide the boost the market needs. Lower prices are likely to drive stronger demand, leading to happier customers and increased sales volumes, he added.

Technical Approach

On the technical front, Bajaj Auto has recently broken out of an“inverted head and shoulder” pattern. This formation often indicates the beginning of a new upward trend, Chandel said.

The stock has also moved above its 200-day moving average, signaling growing buyer confidence. Although momentum has yet to accelerate meaningfully after the breakout, a pickup in pace could set the stage for a sustained rally in the sessions ahead.

Stock Watch

Bajaj Auto shares were up 0.38% at ₹9,418.50 in early trade on Wednesday. It has gained around 6.6% so far this year. On Stocktwits, Bajaj Auto was among the top 3 trending stocks.

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