India’s listed auto ancillary sector has significantly increased its revenues to around Rs 5 lakh crore in the last ten years, with an 11 per cent compound annual growth rate between FY16-26, according to a report. The report by Equirus Securities projects continued robust growth for the sector, with a 21 per cent profit CAGR expected during FY26-28. This growth is attributed to factors like increasing vehicle content, premiumisation trends, export opportunities, and the rising adoption of electric vehicles.
Body & Glass is identified as a particularly promising segment for the upcoming years, with an estimated 30 per cent profit CAGR forecasted for FY26-28. Additionally, Electricals & Lighting and Suspension & Chassis are highlighted as favorable segments due to their exposure to long-term structural growth drivers. The report points out that performance across segments varied significantly despite strong overall industry growth in the past decade.
The fastest-growing category was Electricals & Lighting, with a 17 per cent revenue CAGR, while batteries showed slower growth at 8 per cent. Body & Glass recorded a 12 per cent CAGR during the same period. The report also noted that out of the 52 companies analyzed, 28 surpassed the sector’s average revenue growth between FY16-26. Diversification was identified as a key factor for companies that outperformed the industry average, with acquisitions, product expansions, and geographical reach contributing to their success.
The report emphasizes the increasing value of content per vehicle, driven by trends like premiumisation, electrification, and higher electronics content. It also highlights the role of exports in the sector’s growth over the past decade, along with enhanced localisation and value addition in the automotive supply chain. As the industry enters FY27, it boasts its strongest balance sheet position in ten years, with improved net debt-to-EBITDA ratio and better working capital management.
