Bengaluru, Sept. 9 -- India's auto sector is gearing up for a potential re-rating as multiple growth triggers align at the same time. According to Morgan Stanley, deep GST rationalisation, expected monetary easing, and the rollout of the Eighth Pay Commission could spark one of the strongest demand cycles the industry has seen in years.

The brokerage believes that these changes will not only make vehicles more affordable for consumers but also help auto companies expand margins and strengthen their long-term growth prospects.

Historically, valuations in the auto sector have peaked during periods of strong margins. With cost benefits from GST cuts and improving fundamentals, Morgan Stanley expects the current cycle to surprise on the up...