India's auto ancillary sector revenues triple to Rs 5 lakh crore in a decade
New Delhi, June 11
India's listed auto ancillary sector has nearly tripled its revenues to about Rs 5 lakh crore over the past decade, an 11 per cent compound annual growth rate during FY16-26, a report said on Thursday.
The report from Equirus Securities forecasted the sector to remain on a strong growth trajectory, with a 21 per cent profit CAGR during FY26-28, supported by rising vehicle content, premiumisation trends, export opportunities and growing adoption of electric vehicles.
Among various segments, Body & Glass emerged as one of the most attractive opportunities for the coming years, with the report estimating a 30 per cent profit CAGR over FY26-28.
Electricals & Lighting and Suspension & Chassis were also highlighted as preferred segments due to their exposure to long-term structural growth drivers.
The report noted that while the industry delivered strong overall growth over the last decade, performance varied considerably across segments.
Electricals & Lighting emerged as the fastest-growing category with a 17 per cent revenue CAGR, while batteries lagged the broader industry with 8 per cent growth. Body & Glass recorded a 12 per cent CAGR during the period.
The report found that 28 of the 52 companies under coverage outperformed the sector's average revenue growth during FY16-26.
Companies that outperformed the industry average had diversification as their defining characteristic. Businesses that expanded through acquisitions, product additions, new customers and geographical expansion consistently generated stronger growth than peers dependent on a single growth lever.
The brokerage firm highlighted the increasing content value per vehicle. Premiumisation, electrification and rising electronics content created structural growth opportunities for component manufacturers, while growth linked primarily to regulatory changes tended to normalise after implementation.
Exports also emerged as a key contributor to the sector's expansion over the decade, alongside increasing localisation and value addition across the automotive supply chain.
The report said the industry enters FY27 with its strongest balance sheet position in a decade. Net debt-to-EBITDA improved to 0.18 times in FY26 from 0.49 times in FY22, reflecting stronger cash flows, lower leverage and better working capital management.
— IANS
Reader Comments
While the numbers are great, I hope we're not just assembling imported parts. "Made in India" should mean real localisation and R&D, not just screwing together imported components. Let's see more indigenous innovation! 🇮🇳
Great to see body & glass segment doing so well! My friend's uncle runs a small auto parts unit in Pune and he says demand is through the roof. But with rising input costs, margins are getting squeezed. Hope the govt continues with PLI schemes to keep the momentum going.
As someone working in the EV battery space, I'm a bit disappointed to see battery segment lagging at 8% growth. But it's early days—once we sort out charging infrastructure and local battery production, this segment will explode. The future is electric, no doubt! ⚡
Interesting to see the export angle here. With global supply chains looking for China+1 alternatives, Indian ancillaries have a huge opportunity. The key will be maintaining quality standards and competitive pricing. If we play our cards right, we could be the next automotive manufacturing hub for the world.
Good news but let's not get too excited. The auto sector is cyclical—what goes up can come down. Plus, our per capita car ownership is still very low compared to China. The real test will be sustaining this growth for another decade. Hope the policies remain consistent. acchha hai, but execution matters! 😊
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