New Delhi: Automotive component makers in India are set to report 10-12 per cent growth in revenue during the financial year 2023-24, Crisil Ratings said on Thursday. It attributed the growth to sustained domestic growth – driven by strong demand from automobile manufacturers and after-sales demand from services. “This is despite continued sluggishness in exports,” Crisil Ratings said.
Besides, the ratings agency said softening prices of key raw materials would help their operating margin reach pre-pandemic levels of 12.0-12.5 per cent as against 11.9 per cent last year.
Improving semi-conductor availability will support supplies of passenger vehicles and premium motorcycles. Exports, the second largest revenue contributor, will remain sluggish amid continuing headwinds in key markets of Asia, Africa and Latin America. Lastly, the aftermarket segment Revenue from CRISIL Ratings senior director Anuj Sethi, which accounts for the balance sheet, will grow at a steady 6-8 per cent in the last fiscal, supported by strong automotive sales.
Furthermore, going forward, component markets are expected to diversify their product baskets with increased focus on the requirement of the electric vehicle industry.
“With EV adoption expected to be fastest in the two-wheeler and three-wheeler segments, high-risk auto component manufacturers for engine and transmission components are likely to focus on diversifying their product baskets. This, to meet the PLI Along with the focus on production related commitments and capacity additions, Poonam Upadhyay, Director, Crisil Ratings, said Poonam Upadhyay, Director, Crisil Ratings, will drive capital expenditure.