The best 3 listed Auto component stocks – Industry Overview
While discussing the best 3 listed auto component stocks in India it is worth starting the discussion from the Indian Auto component market. Indian Auto component market turnover for FY2022 is ~US$ 56.5 billion as against US$45.9 billion in FY2021, according to a report published by ACMA. The domestic OEM market contributed 81% of the market while the aftermarket contributed 17.7%. Only 1.2% of this market came from exports. This growth is mainly driven by after-market sales growth during this period.
- The auto component market in India is estimated to grow by expected to grow to US$ 200 billion by FY26 which is a significant jump from the current market size.
- This growth will be mainly driven by favorable government policy, supply chain disruption in China, removal of Covid restriction, and push to green vehicles or electric vehicles from across the globe.
- Domestic demand for auto components in India is going to grow significantly due to increasing demand for electric vehicles, the revival of the economy, and increasing demand for commercial vehicles and passenger cars.
- The government of India announced various policy measures that will aid the growth of this industry – such as
- National Electric Mobility Mission Plan (NEMMP) 2020, where the government is pushing for the adoption of electric vehicles both at the government and private levels.
- The government of India set a target for 30% electric mobility by 2030.
- Automotive Mission Plan 2016-26 where government targets a four-fold growth in the automobile sector in India that includes manufacturers of automobiles, auto components & tractors
- The PLI scheme for the automotive industry intends to promote high-tech green manufacturing such as electric and hydrogen fuel cell vehicles will further augment this industry in India.
- However, the economic slowdown in Europe and China may have some negative impacts on the industry.
Best 3 listed Auto component stocks and various segments in manufacturing:
The auto component industry can be segmented into 7 categories as below. Different companies manufacture different auto components. However, we will discuss the best 3 listed auto component stocks based on their current business turnover and future roadmaps.
- Engines parts
- Electric parts
- Driving transmission and steering parts
- Suspension and breaking parts
- Battery and others
Our intention in this article is to analyze the best 3 listed Auto component stocks across segments of this industry. Let us start with the best one.
Samvardhana Motherson International Ltd. Company overview
Samvardhana Motherson International Ltd. (SAMIL) is one of the best 3 listed auto component stocks in India. It is the top company in terms of revenue. The company is a diversified global manufacturing specialist in the auto components sector that supplies automotive OEMs as well as customers in a range of other industries. Samvardhana Motherson International Ltd. has over 300 facilities – including manufacturing plants, module centers, assembly centers, units for service businesses, etc. across 41 countries. The company is the fastest-growing company in this segment.
Samvardhana Motherson International Ltd. turnover
Samvardhana Motherson International Ltd. reported total revenue from operation of INR 63,536 crores in FY22 as against INR 57,370 Crores in FY21, a growth of 10.7% during this period, as per the annual report FY22. The company is growing strong in terms of organic as well as inorganic. The company just recently acquired its first company in Japan.
Samvardhana Motherson Automotive Systems Group BV (SMRPBV), through its Vision systems division, has agreed with Ichikoh Industries in Japan to buy a 100% stake in its mirror business at an Enterprise Value of JPY 5.2 Bn.
Motherson Sumi Wiring India Limited was formed with the demerger of the domestic wiring harness business of Motherson Sumi Systems Limited (MSSL). Motherson Sumi Wiring India share started its trading debut in the exchanges on 28th March 2022.
- Motherson Sumi Wiring India Limited (MSWIL), is one of the leading suppliers of wiring harnesses to automotive OEMs in India with a diversified and Pan-India industrial footprint.
- The parent company Motherson Sumi Systems Limited holds 33.4% shareholding and Sumitomo Wiring Systems, Ltd., Japan holds 25.3% shareholding in the company.
- The company is headquartered in Noida, India, and operates through a network of 23 facilities across India which helps the company to operate near the OEM locations.
- All major OEMs such as TOYOTA, MARUTI, TATA MOTORS, ASHOK LEYLAND, etc. the customers of the company.
- Mr. Vivek Chaand Sehgal is one of the promoters and Chairman of Motherson Sumi Wiring India Limited. He is also the chairman of the parent company.
- As per the latest annual report, the company reported a revenue of INR 5635 crores in FY22 as against INR 4138 Crores in FY21. EBITDA also went up to INR 760 crores in FY22 as against INR 476 Crores in FY21.
- The PAT and ROCE of the company look strong over the years with PAT INR 410 crores in FY22 as against INR 254 crores in FY21. The company also reported an average ROCE above 40% over the last two years.
- Continuously expanding its operation across India. The company opened a new facility in Chennai to support the growth in the region.
- With zero debt, Motherson Sumi Wiring India share is looking strong to invest for the short to medium term.
Uno Minda is one of the best 3 listed auto component stocks in India. The company started its operation in 1958 and is one of the oldest auto components manufacturers in India. Uno Minda products carry its brand which is a well-recognized brand among vehicle owners in India.
- UNO MINDA has 72 manufacturing plants in India, Indonesia, Vietnam, Spain, Morocco, Mexico Colombia, and Germany design centers in Taiwan, Japan & Spain.
- The company has a strong workforce of over 23000 team members, the Group is headquartered in Manesar, Haryana, India.
- The Minda Group turnover has exceeded the US$ 1 Billion mark now. Amongst the top 200 companies in India in terms of market capitalization with ROCE of 14% in FY22.
- As per the latest annual report, revenue from the operation is growing consistently over the years from INR 4585 crores in FY18 to INR 8313 crores in FY22. PAT has also gone up from INR 310 crores to INR 356 crores during the same period.
- The company has been growing with acquisition and partnership. UNO Minda has set up a joint venture for the Manufacturing of 2-wheeler/3-wheeler Electric Vehicles Components in 2022.
- UNO MINDA manufactures over 20 products.
- UNO MINDA products include Alternate Fuel Systems; Air Filtration Systems; Canisters; Brake Hoses & Fuel Hoses; Combined Braking System (CBS); Noise Suppressor Caps; PDC Parts; Alloy Wheels; Seat Belts; Cameras; EA Pad; Steering Wheels with Airbags; Air Brakes; Fuel Caps; Lighting; Air Ducts & Washer Bottle; Spoiler; Body Sealing; 2W Switches & Handle Bar Assembly, 4W Switches & HVAC; Infotainment Systems(CD Tuners, Display Audio & Audio Video Navigations); RPAS & ADAS; Sensors; End to End Telematics & Connected Car Solutions.
- Mr. Nirmal K. Minda is one of the promoters, Chairman & Managing Director of the company.
- Uno Minda share price is looking strong technically as well for long term investment.
All the above three companies are best in terms of their current performance and future outlook. They are the best in what they are manufacturing. With the growth in the Indian auto industry and export opportunities, these companies are on the top line and are poised to grow.
In addition to the above best 3 listed auto component stocks, I would like to highlight one of the best-unlisted auto components manufacturers that are coming up with an IPO.
Divgi TorqTransfer Systems IPO.
- Divgi TorqTransfer Systems is a leading automotive component manufacturer in India that develops and provides system-level transfer cases, torque couplers, and dual-clutch automatic transmissions (“DCT”) solutions to the OEMs.
- The company is also the largest supplier of transfer case systems to passenger vehicle manufacturers in India.
- It has 3 manufacturing and assembling facilities across India located at Sirsi in Karnataka, and Shivare and Bhosari near Pune in Maharashtra.
- Read details about the company here.