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The Indian auto ancillary industry is a crucial cog in the country’s booming automotive sector, supplying the diverse and essential components that keep vehicles running. Here’s a comprehensive overview:
Current Market:
- Size and Growth: The Indian auto ancillary market is currently valued at INR 7,294.99 billion and projected to reach INR 12,062.31 billion by 2027, growing at a CAGR of ~12.06%. This makes it a significant contributor to India’s GDP, accounting for roughly 2.3%.
- Segments: The industry includes a wide range of segments, from tyres and batteries to castings, bearings, and fasteners. Each segment caters to specific needs of various vehicle types, from two-wheelers to commercial vehicles.
- Major players: Established players like Motherson Sumi, Bosch, Bharat Forge, Mahindra CIE, and Sundram Fasteners dominate the market alongside numerous smaller and regional companies.
- Impact of COVID-19: The pandemic initially caused market challenges due to subdued demand and manufacturing restrictions. However, the industry has recovered strongly and is now on a growth trajectory.
Future Outlook:
- Promising growth: The auto ancillary industry is expected to benefit from several factors, including:
- Rising demand for vehicles across segments, fueled by increasing disposable incomes and a growing middle class.
- Government initiatives promoting Make in India and electric vehicle adoption.
- Technological advancements and focus on innovation within the automotive sector.
- Challenges: Competition from global players, volatile raw material prices, and technological disruptions are factors the industry needs to navigate.
Here are top stocks from Auto Ancillary sector to consider investing:
1. Bosch
Bosch Ltd has presence across automotive technology, industrial technology, consumer goods and energy and building technology. It manufactures and trades in products such as diesel and gasoline fuel injection systems, automotive aftermarket products, industrial equipment, electrical power tools, security systems and industrial and consumer energy products and solutions.
2. UNO Minda
Incorporated in 1985, Uno Minda Ltd is a manufacturer and supplier of Automotive Solutions and systems to Original Equipment Manufacturers
3. Sona BLW Precision Forgings
Sona BLW Precision Forgings is an India-based automotive technology company. The company is engaged in designing, manufacturing and supplying engineered automotive systems and components such as differential assemblies, gears, conventional and micro-hybrid motors, BSG systems and EV Traction motors across all vehicle categories.
4. Banco Products (India)
Banco Products (India) Ltd manufactures and supplies engine cooling modules and systems for automotive and industrial applications in both the domestic and international markets. It was Incorporated in 1961, promoted by Mr. Mehul K. Patel who has more than 40 years of experience in the automotive industry
5. TVS Holdings
Sundaram Clayton Ltd was incorporated in Chennai in 1962 and is part of the TVS group, led by Mr. Venu Srinivasan. It is engaged in the business of manufacturing and distributing aluminum die castings. Sundaram Clayton manufactures non-ferrous gravity and pressure die castings.
6. Fiem Industries
Fiem Industries Ltd was originally incorporated in India as Rahul Auto Private Limited on February 6, 1989, in New Delhi and was founded by Mr. J.K. Jain. It is engaged in the business manufacturing and supply of auto components like automotive lighting.
7. Craftsman Automation
Craftsman Automation started the journey in the year 1986 as a small scale industry in the southern Indian city of Coimbatore, has grown to become a leader in precision manufacturing in diverse fields.
8. Minda Corporation
Minda Corporation Ltd is one of the leading automotive component manufacturing companies in India with a pan-India presence and international footprint.
It is the flagship company of Spark Minda, which was part of the erstwhile Minda Group.
9. Pricol
Pricol Limited is engaged in the business of manufacturing and selling of instrument clusters and other allied automobile components to OEMs and replacement markets.
The business was started in 1974 and is headquartered in Coimbatore, Tamil Nadu.
10. Jamna Auto Industries
Incorporated in 1954, Jamna Auto Industries Limited is a suspension manufacturer and supplier for all segments of commercial vehicles.
Before investing, consider these factors:
- Your risk appetite: Can you handle potential volatility and fluctuations in your investment?
- Investment horizon: Are you looking for short-term gains or long-term wealth creation?
- Research individual companies: Evaluate their financial performance, growth prospects, and management quality.
- Diversify your portfolio: Don’t put all your eggs in one basket. Invest in a mix of companies and sectors to mitigate risk.
- Seek professional advice: Consult a financial advisor for personalized guidance based on your specific financial situation and goals.
