As car and bike showrooms report record-breaking surges during Navratri, fueled by GST rate cuts, leading players like Maruti Suzuki, Hyundai, and Tata Motors are seeing bumper sales. But the real winners for investors are quietly humming in the background — the $80-billion auto components industry. Here, nuts and bolts are driving fortunes far faster than the flashy carmakers themselves.
In the last month, shares of India’s largest car seller Maruti Suzuki rose 13 per cent and Eicher Motors, the two-wheeler giant behind the iconic Royal Enfield bikes, jumped 18 per cent , while many other OEMs eked out single-digit gains. By contrast, stocks of companies supplying components to these giants have soared.
Shares of Banco Products, whose components supply critical systems across top Indian carmakers, are up 42 per cent . Similarly, JTEKT India, whose bearings and steering systems serve major Indian car and commercial vehicle makers, has seen its shares climb 33 per cent .
Other top performers include Samvardhana Motherson International, Pricol, Lumax, and Talbros Auto. On Wednesday, auto components powerhouse Minda Corporation shares ended over 8 per cent higher after announcing plans to grow revenues 3.5x to ₹17,500 crore by FY30.
While the Indian auto sector is expected to grow at 8.8 per cent CAGR by 2034, the auto components market is projected to reach $200 billion by 2030, growing at a blistering 18 per cent CAGR, according to industry estimates. The Indian auto component industry clocked a turnover of $80 billion in FY25, nearly doubling in size over the past five-year period.
Auto component exports are expected to grow at 28-32 per cent CAGR through FY30, powered by India’s emergence as a global manufacturing hub.
“We feel that India auto ancillaries present a better investment opportunity compared to auto OEMs. Auto sales in India have historically grown at high single digits and GST cut can only add a few percentage points over the long term. So, only a select few OEMs may be able to grow faster than market driven by market share gains, but the opportunity set is very limited because of the highly consolidated auto OEM market in India,” Anubhav Mukherjee, Partner at Prescient Capital, told ET Markets.
The secret sauce driving ancillary outperformance lies in what industry insiders call “content per vehicle” (CPV) – the value of components going into each car or bike.
Mukherjee explains the transformation: “Several auto ancillaries have been focusing on increasing content per vehicle to grow much faster than underlying auto industry growth. Premiumisation in Indian auto is a major driver of this trend – the share of SUVs in Indian car sales has increased from 25-26 per cent five years back to 50 per cent + currently.”
The shift is visible across segments. In auto lighting, there’s an increasing move from incandescent to LED lighting priced 2.5-3 times higher, plus growing use of ambient lighting in SUV interiors. Two-wheelers are seeing a significant shift from mechanical instrument clusters toward much more expensive TFT/digital/semi-digital clusters, while sunroof penetration in SUVs continues rising.
Multiple policy levers are amplifying the opportunity. GST rates have been slashed from 28 per cent to 18 per cent , making cars more affordable and boosting demand. PLI schemes for batteries and components are attracting global OEMs to set up shop in India.
Key growth drivers include India’s expanding middle class and urbanization, premiumization trends, government push for EVs and domestic manufacturing, and the global shift toward electrification and sustainability.
The EV transition is opening entirely new revenue streams. “Entry into EV parts like motors, controller units, chargers, automotive displays, etc are opening new growth avenues for well-run listed auto ancillaries,” Mukherjee notes, particularly as companies pursue “substitution of imported components from China and other countries, especially in the EV space.”
DSP Mutual Fund’s Vinit Sambre, who is bullish on auto, said he prefers taking a broader approach within the sector to look at OEMs and ancillaries that are diversified across product segments and well-positioned for multiple technologies, including EVs.
“At present, we are more constructive on two-wheelers and passenger vehicles, while the benefits for commercial vehicles are likely to play out more gradually. It is also worth noting that most auto OEM stocks have already seen a sharp run-up. For further upside, they will need to deliver growth meaningfully above expectations. Otherwise, the better way to capture the opportunity may be through auto ancillaries,” he said.
The Street is also taking notice. LKP Securities recently initiated coverage on Belrise, primarily a two-wheeler auto ancillary with largely powertrain agnostic products, betting that increased four-wheeler business will further improve CPV and lead to stock re-rating.
“Although the 4W business (CV + PV) is contributing just 9 per cent to the topline and at a nascent stage, it is poised for a major ramp up,” LKP said. “We expect 4W revenue share to grow up to 13 per cent in FY 28” driven by broadened product offerings, new order wins, and improved access to Japanese OEMs through acquisitions.
As India’s auto boom accelerates, the real fortunes may not be made by those manufacturing the vehicles but by those making the thousands of components that go into them.
