The auto ancillary sector has demonstrated robust growth, with revenues from publicly listed companies experiencing a compound annual growth rate (CAGR) of 11% from FY16 to FY26, as highlighted in an analysis by Equirus Securities. During this timeframe, sector revenues nearly tripled, approaching ₹5 trillion.
Export activities have played a significant role, more than tripling over the last decade and contributing to the industry’s expansion. An upward trend in vehicle content and premiumization has further bolstered this growth. As the sector transitioned into FY27, it entered with its healthiest balance sheet in a decade, marked by a notable improvement in the net debt-to-EBITDA ratio, dropping to 0.18 times in FY26 from 0.49 times in FY22. This improvement has been supported by enhanced cash flows, reduced leverage, and more effective working capital management.
The Equirus report, titled "Ten Years of Growth, Three Lessons and Where to Look Next," evaluates 52 listed auto ancillary companies and anticipates key themes influencing the sector’s development from FY27 to FY30. Among the companies analyzed, 28 outperformed the average sector revenue growth; however, performance varied considerably among individual companies and segments.
Furthermore, the analysis predicts a CAGR of 21% in profit after tax (PAT) for these companies from FY26 to FY28. Notably, the body and glass segment is recognized as a promising area, with projected PAT growth expected to reach 30% during this period. The report emphasizes diversification as a crucial factor in achieving sustainable long-term growth within the sector.
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