Indian Auto Component Industry’s Revenues Up 8-10%

New Delhi: The revenue growth of the Indian auto component industry is projected to expand by 8-10 per cent in FY26, according to a report on Thursday.

Credit rating agency ICRA expects operating margins to remain range-bound and hover at 11-12 per cent in FY25 and FY26, supported by benefits from operating leverage, higher content per vehicle and value addition, while remaining vulnerable to any significant unfavourable movements in commodity prices and foreign exchange rates. The disruption along the Red Sea route has resulted in a surge in ocean freight rates by 2-3 times in CY2024, compared to CY2023.

Any further sharp and sustained increase in ocean freight rates could also have a bearing on margins for auto component suppliers having significant exports/imports.

ICRA estimates the auto component industry to incur a capex of Rs25,000-30,000 crore in FY2026 towards capacity expansion, localisation/capability development and technological advancement (including EVs), among others.