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India Auto Components
Overseas sales – Paving growth
The Indian auto components sector is primed to benefit from
recovery in overseas sales and continuing growth in the domestic
auto sector. Streamlining of costs and improving productivity
have led to healthier financials; also, diversification in non-auto
segment and wider exports coverage are new revenue drivers.
Overseas sales to strengthen. On the ongoing recovery in US
and Europe, we expect a rise in auto demand from OEMs/ tier-1
suppliers, fueling overseas revenue for Indian auto-part players.
We expect a 28.1% CAGR in standalone exports over FY11-13e
for our auto-parts coverage vs. 19.7% for domestic sales.
Steady growth in domestic auto sector. After two years of swift
growth, the Indian auto sector has now entered a steady growth
phase. We expect a 13.7% CAGR in industry volumes over FY11-
13e, thereby providing firm support to auto components.
Improved efficiencies, de-risking. Auto-parts companies are
benefiting from efforts to conserve cash, reduce costs and raise
productivity. Also, de-risking via entry into the non-auto segment
and prudent investments would lead to 21.5% sales CAGR in
FY11-13e vs. 15% for the auto industry.
Stock picks. Our top picks: Motherson Sumi (diversified), Setco
(replacement demand), Gabriel (demand growth), Bharat Forge
(good business model), and Amtek Auto (overseas recovery,
attractive valuations). Risks are demand slowdown, commodity
cost pressures, delay in export ramp-up due to slowdown.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
India Auto Components
Overseas sales – Paving growth
The Indian auto components sector is primed to benefit from
recovery in overseas sales and continuing growth in the domestic
auto sector. Streamlining of costs and improving productivity
have led to healthier financials; also, diversification in non-auto
segment and wider exports coverage are new revenue drivers.
Overseas sales to strengthen. On the ongoing recovery in US
and Europe, we expect a rise in auto demand from OEMs/ tier-1
suppliers, fueling overseas revenue for Indian auto-part players.
We expect a 28.1% CAGR in standalone exports over FY11-13e
for our auto-parts coverage vs. 19.7% for domestic sales.
Steady growth in domestic auto sector. After two years of swift
growth, the Indian auto sector has now entered a steady growth
phase. We expect a 13.7% CAGR in industry volumes over FY11-
13e, thereby providing firm support to auto components.
Improved efficiencies, de-risking. Auto-parts companies are
benefiting from efforts to conserve cash, reduce costs and raise
productivity. Also, de-risking via entry into the non-auto segment
and prudent investments would lead to 21.5% sales CAGR in
FY11-13e vs. 15% for the auto industry.
Stock picks. Our top picks: Motherson Sumi (diversified), Setco
(replacement demand), Gabriel (demand growth), Bharat Forge
(good business model), and Amtek Auto (overseas recovery,
attractive valuations). Risks are demand slowdown, commodity
cost pressures, delay in export ramp-up due to slowdown.
Nice Article, The Indian auto and auto components industry is growing at a steady pace of 15 - 18 per cent annually. On the export front, India is gradually positioning itself as a trusted name in global auto component industry. In the recent years, auto component manufacturers are gradually moving up in the value chain. Their share of supply to OEMs in total exports is increasing and supply to the aftermarket is decreasing. Attributes like improving component quality, cost effectiveness even at lower level of production levels are differentiating Indian component suppliers from their foreign counterparts. The trend is expected to prevail in future also, which will strengthen the industry outlook in the country. Industry Analysis Report
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