Comfortable ride for component firms as domestic auto sales rise unabated2 min read 06 Mar 2018, 07:31 AM IST
Forty-three companies that account for 26% of the component sector's revenues grew 18.5% year-on-year in the December quarter
If auto sales are on overdrive, can auto component makers be far behind? Component makers are comfortably riding piggyback on the growing fortunes of domestic original equipment manufacturers (OEMs). The December quarter’s stellar revenue growth and margin expansion for component firms mirror the gains from many positive factors that came together. The low base of the year-ago period when growth hit a roadblock due to demonetization set the stage for higher growth this time round. Then, strong growth across all auto segments increased demand for components. High demand made it possible for manufacturers to pass on cost increases to the original equipment suppliers which also supported revenue growth.