Industry reported growth of 6% during Q3 FY2017 despite demonetization impact; headwinds from steady increase in commodity price : ICRA

  • Steady increase in commodity prices a concerning factor for auto component industry profitability
  • Demonetization impact short lived; industry to recover fully by March 17
  • PV and M&HCV production grew by 11.8% and 4.2%, respectively despite much weaker domestic wholesale volume
  • Indian auto component export has a high exposure on the USA and EU markets, which together accounted for 60% of total auto component exports from India.
  • Operating margin in FY17 are likely to ease around 14.9%-15% level from 16% level in FY16.
  • ICRA maintains 10-12% long term CAGR expectation for Indian auto component industry.

Enclosed entire report

Auto Component Note_Media Note_March 2017