+
India Ratings Keeps Neutral Outlook for Auto Ancillaries in FY26
ECONOMY & POLICY

India Ratings Keeps Neutral Outlook for Auto Ancillaries in FY26

India Ratings and Research (Ind-Ra) has maintained a neutral outlook for the auto ancillary sector for FY26, forecasting a revenue growth of 8-10 per cent year-on-year (Y-o-Y). This growth is anticipated to be fuelled by factors such as premiumisation, rising electric vehicle penetration, and increasing global OEM investments in India.

However, the outlook is not without its challenges. Muted exports, especially from Europe, and a slowdown in domestic sales growth (except for two-wheelers) may affect profitability.

Despite these challenges, Ind-Ra expects certain factors to help sustain margins in the auto ancillary sector. One of these factors is steady demand from the replacement market, as domestic demand for replacement parts is expected to remain consistent, acting as a buffer against any decline in new vehicle sales.

Moreover, improved operating leverage is expected as auto ancillary companies scale up production to meet growing demand, benefitting from economies of scale. With supply chain constraints easing, raw material prices are likely to remain stable, helping control production costs. Companies that are investing in the development of advanced EV-related components are anticipated to be well-positioned for future growth.

The trend of consumers preferring premium vehicles with more features is also expected to continue, driving increased demand for auto ancillary components. Additionally, the growing adoption of electric vehicles (EVs) is set to create new opportunities for auto ancillary companies to develop and supply EV-specific components.

As global OEMs look to diversify their supply chains away from China, India is emerging as a key investment destination, which is expected to boost demand for products from Indian auto ancillary companies.

News source: Business Standard

India Ratings and Research (Ind-Ra) has maintained a neutral outlook for the auto ancillary sector for FY26, forecasting a revenue growth of 8-10 per cent year-on-year (Y-o-Y). This growth is anticipated to be fuelled by factors such as premiumisation, rising electric vehicle penetration, and increasing global OEM investments in India. However, the outlook is not without its challenges. Muted exports, especially from Europe, and a slowdown in domestic sales growth (except for two-wheelers) may affect profitability. Despite these challenges, Ind-Ra expects certain factors to help sustain margins in the auto ancillary sector. One of these factors is steady demand from the replacement market, as domestic demand for replacement parts is expected to remain consistent, acting as a buffer against any decline in new vehicle sales. Moreover, improved operating leverage is expected as auto ancillary companies scale up production to meet growing demand, benefitting from economies of scale. With supply chain constraints easing, raw material prices are likely to remain stable, helping control production costs. Companies that are investing in the development of advanced EV-related components are anticipated to be well-positioned for future growth. The trend of consumers preferring premium vehicles with more features is also expected to continue, driving increased demand for auto ancillary components. Additionally, the growing adoption of electric vehicles (EVs) is set to create new opportunities for auto ancillary companies to develop and supply EV-specific components. As global OEMs look to diversify their supply chains away from China, India is emerging as a key investment destination, which is expected to boost demand for products from Indian auto ancillary companies. News source: Business Standard

Next Story
Infrastructure Urban

India to Invest Rs 600 Billion to Upgrade 1,000 ITIs

As part of its drive to modernise vocational training, the Ministry of Skill Development and Entrepreneurship (MSDE), in collaboration with Gujarat’s Labour and Employment Department, held a State-Level Workshop at the NAMTECH Campus within IIT-Gandhinagar to discuss the National Scheme for ITI Upgradation.The consultation brought together key stakeholders from industry and the training ecosystem to align expectations and support implementation of the scheme, which aims to transform 1,000 Industrial Training Institutes (ITIs) across India using a hub-and-spoke model. The total outlay stands ..

Next Story
Infrastructure Urban

India Unveils Rs 600 Billion Maritime Finance Push

The Ministry of Ports, Shipping & Waterways (MoPSW) hosted the Maritime Financing Summit 2025 in New Delhi, bringing together over 250 stakeholders including policymakers, industry leaders, global investors, and financial institutions. The summit, held under the ambit of Maritime Amrit Kaal Vision (MAKV) 2047, focused on transforming India into a leading maritime power with strengthened financial, infrastructural, and technological capabilities.Union Minister Sarbananda Sonowal emphasised India's strategic progress, noting that average port turnaround times have dropped from four days to u..

Next Story
Infrastructure Urban

Govt Allocates Rs 500 Million To Boost Community Radio

The Central Government, through its ‘Supporting Community Radio Movement in India’ scheme, has allocated Rs 500 million to strengthen the community radio ecosystem across the country. The initiative aims to assist both newly established and long-operational Community Radio Stations (CRSs), ensuring their relevance to local educational, social, cultural, and developmental needs.According to the policy published by the Ministry of Information and Broadcasting, CRSs may be set up by not-for-profit organisations with at least three years of demonstrated community service. These stations are ex..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?