Component by Component: How Auto Ancillaries Could Steer the Indian Stock Market in 2025 Part 1

Projected Growth in FY2025 The Indian auto ancillary industry is expected to experience a moderated revenue growth of 5–7% in FY2025, a decline from the 9–11% growth in FY2024. This slowdown is attributed to anticipated moderation in domestic Original Equipment Manufacturer (OEM) demand and a weak export outlook. ​ (Source:mint,Business & Finance News India,The Financial Express) Despite the slowdown, the sector is poised to benefit from stable replacement demand, projected to grow at 5–7%, driven by factors such as increased mobility, a healthy vehicle parc, and rising used car sales. ​ (Source:Business & Finance News India,The Times of India) Investment and Capital Expenditure Trends Auto component manufacturers plan to invest ₹20,000–25,000 crore in FY2025 towards capacity expansion and technological advancements. Notably, 40–50% of this investment is earmarked for electric vehicle (EV) components, indicating a strategic pivot towards electrification. ​ (Source:Business & Finance News India,The Times of India,The Financial Express) This capital expenditure represents approximately 7–8% of the operating income of auto ancillary companies, with expectations to increase to 8–10% of sales in subsequent years, reflecting a commitment to long-term growth and innovation. ​ (Source:The Times of India)