New Delhi, Dec. 27 -- After a strong 2025, the Indian auto sector is entering 2026 on a stronger footing aided by domestic demand after GST rate cuts and favourable policy measures. The Nifty Auto index has already gained 22% so far this year, reflecting optimism around earnings visibility and structural growth drivers. In comparison, the benchmark Nifty 50 has added 10% in 2025 YTD.

Performance trends for the space has remained positive in recent times. The auto index rose 20% over the past one year, 15% in the last six months, 5% over the past three months, and 0.5% in the last one month.

A major catalyst for the strong 2025 was the GST rate cuts announced in September 2025, which reduced vehicle prices across segments and triggered a...