Consistent Compounders: These auto ancillary stocks have delivered a CAGR of more than 40 per cent in the last 3 years!

Strong demand anticipation, a greater shift toward launching new electric vehicles (EVs) and a large number of investments from the PLI Scheme would be the few factors that would trigger capital expansion growth for the coming fiscal

The Indian automotive ancillary sector is estimated to grow by 14-16 per cent for this fiscal i.e. FY23. An increase in production of passenger and commercial vehicles in FY23 could help the demand from OEMs to grow by 18-20 per cent. The demand growth for aftermarket products is estimated to be 7-8 per cent this fiscal. This number might seem low due to a higher base for the last fiscal year which was due to an increase in the replacement period on account of the pandemic. The export business witnessed 40 per cent growth in FY22 and is expected to increase 8-10 per cent in FY23 owing to stable demand from the European and US markets.

The capital expenditure of automotive ancillaries is estimated to grow by 30 per cent on a YoY basis. Strong demand anticipation, a greater shift toward launching new electric vehicles (EVs) and a large number of investments from the PLI Scheme would be the few factors that would trigger capital expansion growth for the coming fiscal.

Have a look at the complete list of auto ancillary stocks delivering returns with a CAGR of more than 40 per cent over the past three years