The auto ancillary industry is one of India’s crucial sectors that contributes to 2.3% of the country’s GDP and generates employment for 1.5 million people directly and indirectly. The sector is primarily driven by strategic partnerships and in-house research and development established by the industry players. Having said that, the Indian auto ancillary stocks offer significant capital appreciation to those who invest in them. This article will explore the lucrative investment opportunities in the best auto ancillary stocks and things to consider before investing.
An industry overview
Here are a few critical metrics of the Indian auto ancillary industry that will facilitate your research about investment opportunities in the sector.
The industry can be broadly divided into organised and unorganised sectors. The organised sector that caters to the OEM segment is associated with the leading automakers. The unorganised sector comprises small manufacturers of low-value products that primarily cater to the aftermarket segment.
The Indian auto ancillary industry is backed by auto manufacturers’ demands and government initiatives, including a US$ 200 million fund from the Department of Heavy Industries and Public enterprises that will modernise the industry. It will provide interest subsidies to loans, investment to new plants and equipment, and export benefits to intermediate auto components suppliers.
The FDI in the segment has seen steady growth in the last few years, amounting to US$ 24.5 billion from April 2000 to June 2020. The ‘Make in India’ drive is expected to bring additional investment in the Indian automobile segment.
However, it is essential to remember that the performance of the ancillary industry is closely related to the demand for automobiles in the economy. Demand swings in this segment will directly impact the demand for auto-ancillary products.
Top auto ancillary stocks in India
| Sl No. | Company Name | Share price change in last 12 months % | PE ratio (TTM) (Industry PE Ratio 39.19) |
| 1 | Bosch Ltd | 5.50 | 39.41 |
| 2 | UNO Minda | 24.99 | 64.14 |
| 3 | Motherson SUMI | -48.52 | 65.74 |
| 4 | Rajratan Global Wire | 121 | 36.89 |
| 5 | Varroc Engineer | -1.77 | NA |
| 6 | Pricol | 63.21 | 22.00 |
| 7 | GNA Axles | -11.51 | 14.73 |
| 8 | Enkei Wheels | 67.10 | 41.47 |
| 9 | Rane Brake | 0.27 | 17.86 |
| 10 | Ndr Auto Components | 82.50 | 15.83 |
| 11 | Kinetic Engineering | 86.05 | 213.14 |
| 12 | Frontier Springs | 78.44 | 26.63 |
| 13 | Kranti Industries | 111.49 | 30.19 |
Bosch Ltd.
Bosch provides technology and services in mobility solutions, industrial technology, consumer goods, and energy and building technology. One of the company’s segments includes automobiles. It is one of the top auto ancillary stocks to add to your portfolio.
Market Cap: ₹ 50,983 crore
EPS (TTM): 438.67
Profit/loss in 2022: ₹1,218 crore
UNO Minda
UNO Minda or Minda Industries Ltd. is a global supplier of proprietary automobile solutions and services to original equipment manufacturers (OEM). It offers a diversified product portfolio, including switching systems, lighting, automobile acoustic systems, seating systems, and alloy wheels.
Market Cap: ₹ 31,492 crore
EPS (TTM): 8.57
Profit/loss in 2022: ₹356 crore
Motherson SUMI
Motehrson SUMI is an India-based auto component manufacturing and supplying company to the automotive and transport industries..
Market Cap: ₹ 51,128 crore
EPS (TTM): 0.83
Profit/loss in 2022: ₹411 crore
Rajratan Global Wire
It manufactures and sells tyre bead wires and other ancillary products. The company’s share price has increased 121% in the past twelve months.
Market Cap: ₹ 4,705 crore
EPS (TTM): 25.12
Profit/loss in 2022: ₹124 crore
Varroc Engineer
The India-based auto parts producer designs, manufactures, and supplies lighting systems, polymer components, electrical-electronic components, and precision metallic components to the automobile and transportation industry.
Market Cap: ₹ 4,484 crore
EPS (TTM): 27.69
Profit/loss in 2022: -₹1110 crore
Pricol
The company manufactures and supplies auto components and precision engineering products and caters to the original equipment manufacturers (OEM) of two/four-wheelers, passenger vehicles, commercial vehicles, farm equipment and others.
Market Cap: ₹2,257 crore
EPS (TTM): 8.42
Profit/loss in 2022: ₹55.05 crore
GNA Axles
GNA Axles Ltd. is involved in manufacturing automotive transmission components. It is one of the auto ancillary stocks in India that you can add to your portfolio.
Market Cap: ₹1,402 crore
EPS (TTM): 44.34
Profit/loss in 2022: ₹88.76 crore
Enkei Wheels
The company is a manufacturer of aluminium alloy wheels for two and four-wheelers.
Market Cap: ₹1,047 crore
EPS (TTM): 14.05
Profit/loss in 2022: ₹16.28 crore
Rane Brake
The company offers a diversified product range in brake lines, disc pads, clutch facing and buttons, sintered brake pads, brake shoes, and others.
Market Cap: ₹579 crore
EPS (TTM): 41.93
Profit/loss in 2022: ₹27.07 crore
Ndr Auto Components
The India-based company manufactures, fabricates, and assembles every kind of automotive component, including seats, spare parts, seat components etc.
Market Cap: ₹344 crore
EPS (TTM): 36.55
Profit/loss in 2022: ₹14.89 crore
Kinetic Engineering
Kinetic Engineering offers a range of products in transmission components like gear shafts, axles, and more.
Market Cap: ₹238 crore
EPS (TTM): 0.56
Profit/loss in 2022: ₹1.36 crore
Frontier Springs
Frontier Springs manufactures hot wound springs for transportation, industrial, and government applications, including mass transit, locomotive, vibration control, industrial triple coil, single coil, railroad and others.
Market Cap: ₹192 crore
EPS (TTM): 18.33
Profit/loss in 2022: ₹7.51 crore
Kranti Industries
The precision machining in auto ancillary and allied sector company stocks have given over 100% returns to investors in one year. It is one of the best auto ancillary stocks in India that you can add to your portfolio.
Market Cap: ₹83 crore
EPS (TTM): 2.60
Profit/loss in 2022: ₹2.22 crore
Final Words
If the above set of stocks excites you, open a demat account and explore investment opportunities with the best auto ancillary stocks today!
Disclaimer: This blog is written for educational purposes only. The securities quoted here are only examples and not recommendations.
