Can these five smallcap auto ancillaries ride India’s next auto boom?

Against this backdrop, several small-cap auto ancillary companies are expanding capacity, diversifying product portfolios and entering new segments to drive their next phase of growth.

Here are five such companies.

Lumax Auto Technologies

Lumax Auto Technologies (LATL), part of the DK Jain Group, manufactures an EV-agnostic product portfolio for passenger vehicles (PVs), two- and three-wheelers (2/3Ws), and commercial vehicles (CVs).

Its key product categories include advanced plastics such as cockpits and consoles and door panels; mechatronics including power window switches and antennas; structures and control systems such as smart actuators and gear shifters; and alternative fuels.

Advanced plastics accounted for 53% of revenue in FY26, followed by structures and control systems at 17%, aftermarket at 10%, alternative fuels at 8%, mechatronics at 6% and other segments at 7%.

PVs remain the company's largest automotive segment, contributing 53% of revenue, followed by 2/3Ws at 24%, aftermarket at 10%, CVs at 9% and other categories at 5%.

M&M is LATL's largest OEM customer, contributing 27% of revenue, followed by Bajaj at 14%, Maruti Suzuki India at 10%, Lumax Industries at 8%, Tata at 6% and HMSI at 5%. Others account for 21%.

LATL is executing its mid-term FY26-31 plan, BRIDGE (Bold Roadmap Integrating Diverse Growth Engines), to drive its next phase of growth. It aims to transform from a traditional Tier-1 supplier into a Tier-0.5 system integrator through its 'Northstar: 20.20.20.20' vision.

The company plans to grow revenue at least 20% CAGR to ₹11,000 crore by FY31, from ₹3,637 crore in FY25. FY26 revenue stood at ₹4,870 crore, up 34% YoY.

Future and clean mobility is expected to be a major growth driver, with its contribution to revenue targeted to rise from 6% in FY25 and 15% in FY26 to 20% by FY31.

The acquisition of a 60% stake in Greenfuel Energy Solutions, the merger of which is now fully completed, will remain a key growth driver over the next 3-5 years.

This expansion is expected to generate operating leverage, with Ebitda projected to double to ₹1,000 crore by FY28 from ₹500 crore in FY25. Ebitda grew 36.7% YoY to ₹710 crore in FY26, with margins at 14.5%.

Operating margins are expected to expand to 16% by FY28 and eventually reach 20% by FY31. Return on Capital Employed (RoCE) is also expected to improve to 20% from 18% in FY25.

The company plans to achieve these targets through product diversification, deeper engagement with automobile companies, higher content per vehicle and targeted acquisitions. Lumax is consolidating its joint ventures and scaling up mechatronics, while also strengthening its position in software-defined mobility through SHIFT (Smart Hub for Innovation and Future Trends).

The company is entering high-value vehicle electronics and the Body Control Module (BCM) market. BCM production is scheduled to reach Start of Production (SOP) within 45 to 60 days of June 2026, helping deepen OEM integration.

Financially, Lumax's net profit before minority interest increased 47% YoY to a record ₹337 crore. Its order book stands at ₹1,450 crore.

SJS Enterprises

SJS Enterprises (SJS) is one of India's leading design and aesthetics-focused decorative manufacturing companies. It designs and manufactures high-value decorative parts across 14 product categories for seven end-user segments, with a focus on automotive, particularly 2Ws and PVs, as well as consumer appliances and electronics.

Its key products include body graphics, badges and logos, displayers and cover glass. SJS is a partner and co-creator for several leading global and domestic OEMs, including Hero MotoCorp, Mahindra, Bajaj and Honda.

PV accounted for 41.7% of FY26 revenue, followed by 2W at 38.3%, consumer appliances at 15.5% and others at 4.5%. India accounts for 90.5% of revenue, while exports contribute 9.5%.

SJS has delivered a five-year CAGR of 30% across revenue at 30.6%, Ebitda at 29.3% and net profit at 29.2%. To maintain this momentum, it plans to invest around ₹270 crore across multiple growth initiatives.

SJS is investing approximately ₹100 crore in a new greenfield facility in Pune to double SJS Decoplast's chrome plating and painting capacity. The plant is in the final stages of commissioning.

It is also investing ₹40-45 crore to add 20% incremental capacity at its Bangalore facility, which operated at 75% capacity in FY26.

The company is setting up a plant in Hosur for display system assembly, with a Phase 1 capital outlay of ₹65 crore. Product assembly is expected to begin in early FY28.

SJS is also expanding into premium, technology-driven solutions including in-mold electronics, illuminated logos, in-mould decorative parts and digital display integrations. It aims to use these next-generation products to increase realisation per product over legacy kit values.

The company aims to increase its legacy per-vehicle PV kit value by 5-8x from ₹1,200-1,500 per vehicle. It has already risen 3x to ₹3,500-5,000 per vehicle. SJS also aims to increase its 2W kit value by 1.5-2x from its legacy baseline of ₹300-500 per vehicle.

Higher kit values can deepen client relationships and drive revenue growth. The contribution of new-generation products is expected to rise from 24-25% currently to 30% over the next five years.

SJS also aims to increase exports to 14-15% of revenue by FY28, from 9.5% in FY26, driven by recent business wins and new programmes with global OEMs.

The company has entered into a strategic technology licence-cum-supply agreement with Hong Kong-based BOE Varitronix. BOEVX will supply components and assist with localisation.

SJS is building end-to-end hardware capabilities spanning cover glass machining, printing, special coatings such as anti-reflection, anti-glare and anti-fingerprint coatings, optical bonding of TFT clusters and backlight assembly.

To fund these growth initiatives, SJS has a net cash position of ₹2.4 billion.

Ramkrishna Forgings

Ramkrishna Forgings (RKFL) is an engineering company specialising in forgings and castings. It manufactures highly engineered components using hot forging, warm forging, cold forging, ring rolling and press line operations.

Commercial vehicles remain its core business, but RKFL has expanded into passenger vehicles and EVs. It also serves non-automotive segments including railways and metros.

The company is seeing substantial order wins in PVs and 2Ws. In Q1FY27, it secured around ₹280 crore in new automotive orders with a programme life of four years. PVs accounted for 82% of these orders and two-wheelers for 18%.

Its PV business is split equally between traditional ICE and EV segments. Expanding non-automotive verticals and casting operations represent another major growth pillar, with railways, oil and gas, mining, earth moving and farm equipment scaling up.

The recent commissioning of 28,800 MT of casting capacity has broadened the growth platform. In Q1FY27, casting volumes increased 84.8% YoY, and RKFL is ramping up utilization across its casting plants.

Entry into high-margin sectors such as aerospace, robotics and semiconductors could provide another growth avenue, allowing RKFL to participate in segments historically dominated by global players.

The company currently has no exposure to aerospace projects but has begun building capabilities and is actively quoting for various Requests For Quotations in these fields.

In aerospace, RKFL plans to develop non-ferrous forgings and casting solutions using aluminium, titanium, Inconel and Nimonic grades. It has already started bulk commercial supplies of aluminium forgings. To handle advanced alloys such as titanium and Inconel, it is making minor heating-system upgrades. It expects these high-value materials to contribute meaningfully to revenue over the next 8-10 quarters.

RKFL has completed the majority of its capex and is now focused on maximising utilisation of commissioned facilities. It added 3,000 MT and 40,000 MT of press line capacity in Q4FY26, and another 18,000 MT in Q3FY26.

With this infrastructure in place, the company expects utilisation rates across plants to improve sequentially, targeting overall capacity utilisation of 75-80%.

By scaling production, RKFL aims to generate operating leverage and maximise asset turns. It is targeting an asset turn of 2.5 on a standalone net block of ₹3,700 crore, while aiming to generate robust free cash flow and reduce net debt by ₹500 crore during FY27.

Wheel manufacturing has also commenced trial production through a joint venture. The JV plans to submit its first batch of 300 wheel samples to Indian Railways for testing and trials in August. Commercial supplies are expected to commence by October 2026.

The company already has a contracted order for 80,000 wheels, along with 25,000 JV partner obligations, from Indian Railways. This combined 110,000-wheel volume is expected to ensure high capacity utilisation through the end of FY28. The JV will then look to tap growing wheel export markets.

Meanwhile, RKFL's Mexico acquisition has commenced active production and generated ₹6 crore in revenue during Q1FY27, with material revenue contribution expected from Q3FY27.

Exports are projected to account for about 35% of revenue in FY27, compared with 32.3% in Q1FY27. Management expects revenue to reach ₹8,000 crore by FY29 at a CAGR of 22-25%.

Pricol

Pricol is an Indian automotive components and precision engineering company with three business segments: Driver Information and Connected Vehicle Solutions (DICVS), Actuation, Control and Fluid Management Systems (ACFMS), and Precision Products (Polymer Division).

Pricol has a dominant market position in the DIS segment, with a 30-35% share in the 2W market, 66.7% in CVs and 8-9% in PVs.

DICVS and ACFMS together accounted for 77% of Q1FY27 revenue, while the Polymer business contributed 23%. Its clientele includes leading PV and CV companies, 2W/3W manufacturers and EV players.

The company's key growth opportunity lies in the auto sector's transition towards high-end graphics, advanced safety systems and connected technology. Pricol is shifting its portfolio towards premium Driver Information Systems such as TFT clusters, LCD clusters, e-cockpits and Telematics Control Units.

It is also diversifying into high-growth automotive verticals, with commercial production of disc brakes and advanced switches launched for major domestic OEMs. Meaningful revenue contributions from these products are expected only from FY28.

To support its growth strategy and robust order pipeline, Pricol is executing a major ₹700 crore capex cycle over 18-24 months. Five new factories are at the heart of this expansion.

Three plants are currently being commissioned, one is under construction and another has just begun construction. Management expects these facilities to start contributing to revenue by mid-2027.

Pricol is also expanding its Polymer division, which has been facing capacity constraints. The new plant will support a substantial business pipeline with clients such as Honda, Yamaha and Royal Enfield.

The ₹400 crore investment in the Polymer business is aimed at doubling its peak capacity from its current level of ₹1,000-2,000 crore of turnover. The plant is scheduled to go live within the next 9-12 months and is expected to support both revenue growth and margin expansion.

Pricol aims to double its FY26 revenue of ₹3,960 crore to ₹8,000 crore by FY31.

Minda Corporation

Minda Corporation is a major player in the global automotive industry. Its FY26 revenue mix comprised wiring harnesses at 31%, vehicle access systems at 22%, driver information systems at 17%, die casting at 15% and other businesses at 15%. Vehicle access systems include products such as sunroofs and power liftgates.

Two- and three-wheelers contribute 48% of revenue, followed by CVs at 28%, PVs at 14% and aftermarket at 10%. The company's core principle is to grow at least 50% faster than the automotive industry.

The group aims to scale total group-level revenue to ₹17,500 crore by FY30, from approximately ₹9,000 crore in FY26. Alongside this doubling of revenue, it is targeting a 12.5% Ebitda margin.

To achieve this, Minda is pursuing organic expansions, joint ventures and consolidations. For future expansion, it acquired several land parcels across major industrial clusters during FY26.

To address advanced cockpit and cockpit electronics requirements, Minda's second instrument cluster facility is under commissioning and is expected to be operational by Q1FY28.

The company is also constructing a fifth die-casting plant in Pune, which is expected to be commissioned in about 18 months, around late 2027.

To accelerate its presence in the PV segment, Minda plans to consolidate its associate company, Minda VAST, from FY27.

Minda VAST specialises in passenger car locking and access systems. It generated approximately ₹500 crore in revenue in FY26 at a 7% Ebitda margin. The consolidation directly supports Minda's target of raising its PV revenue contribution to 25% of group sales, from 14% in FY26.

Mass production of sunroofs is scheduled to begin in 4 to 5 months. Meanwhile, the JV with Japan's Toyodenso to manufacture electromechanical switches, sensors and electronics is scheduled to begin in Q4FY27.

Conclusion

The common thread across these companies is their focus on increasing content per vehicle rather than relying solely on higher vehicle volumes.

Whether through premium electronics, vehicle access systems, advanced forgings or capacity expansion, each is positioning itself to capture a larger share of OEM spending.

Investors should track execution, order conversion, margin expansion and the automobile demand cycle, given the sector's inherent cyclicality.

Rather than relying on hype, investors need to carefully analyse each company's fundamentals, including financial performance, corporate governance practices and growth strategies.

Happy investing.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.

This article is syndicated from Equitymaster.com