Crisil projects 7–9% growth for India's auto component industry in FY25
Operating margins in the sector are projected to remain stable at 12–12.5 percent this fiscal, supported by the increasing share of high-margin components such as automated driver assistance systems (ADAS) modules, infotainment systems, and advanced braking systems. A decline in input costs — particularly of steel (45–50% share in input costs), aluminium (15–20%), and plastics (10–12%) — used for structural rigidity, weight reduction, and interiors, will further support profitability. However, the imposition of new tariffs could erode margins for companies heavily reliant on US exports, Crisil warns.
Continued high capital expenditure will be funded primarily through internal accruals. Alongside tight control over working capital, this will limit dependence on external borrowing, keeping credit profiles stable.
An analysis by Crisil Ratings, covering automotive component makers that accounted for nearly 35 percent of the sector's total revenue of approximately ₹7.9 lakh crore last fiscal, supports this outlook. However, demand trends are expected to vary across the three key segments served by component manufacturers — original equipment manufacturers (OEMs), the aftermarket, and exports.
'Demand from automotive OEMs, which contribute two-thirds of total revenue, is expected to grow 8–9 percent this fiscal, with value growth outpacing volume growth due to rising safety, emission, and electronic content, especially in PVs and 2Ws,' said Poonam Upadhyay, Director, Crisil Ratings.
'The aftermarket segment will post steady 6–7 percent growth, supported by an ageing vehicle base. Export growth, however, is expected to moderate to 7–8 percent amid weak demand for internal combustion engine vehicles and a slowdown in electric vehicle (EV) adoption across the US and Europe,' she added.
While the US contributes only about 5% to total industry revenue, it commands a significant 28 percent share of export earnings and is currently the fastest-growing export market for auto components. The proposed 25% tariff by the US could significantly impact companies with high exposure to that market.
According to Anil More, Associate Director, Crisil Ratings, high-margin, technology-intensive components now account for around 27 percent of the segment's revenue, up from about 18 percent before the COVID-19 pandemic — a shift driven by premiumisation and stricter emission norms.
'This structural shift, along with easing input costs, will help players sustain operating margins at 12–12.5 percent this fiscal despite global headwinds. However, companies with heavy export dependence on the US may see margin compression of 125–150 basis points, given limited scope to pass on the impact of tariffs,' said More.
The sector's credit outlook remains stable for this fiscal, supported by strong cash flows and minimal debt addition, despite continued capital expenditure of about ₹22,000 crore aimed at enhancing EV capabilities, automation, and precision manufacturing — in line with new model launches featuring more EVs.
However, as EVs currently represent only around 4 percent of passenger vehicle volumes, their revenue contribution remains marginal, limiting near-term returns from this segment.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
4 hours ago
- Time of India
Consumer forum orders refund after Covid-19 disrupts travel plans
In a classic case of vacation plans gone viral, the Ghaziabad Consumer Forum has ruled in favor of Ishan Pratap Singh, a traveler who was forced to cancel a family trip to the Maldives in 2021 after testing positive for Covid-19—just a day before departure, reported TOI. Singh had booked the dream getaway from Mumbai through Ineedtrip , a Ghaziabad-based travel agency, coughing up a hefty Rs 1.9 lakh as an advance (and even taking a Rs 1.4 lakh loan to fund it). But when he tested positive via an RT-PCR on March 12, he requested the agency to reschedule the trip originally planned for March 13–17, as per the TOI report. Though he tried to shuffle the dates—first aiming for May, then April, and finally November 2021—he was met with repeated refusals. The agency cited expiry of certain travel packages and warned of forfeiture by the partner hotel after September. Despite these pandemic-related hurdles and Singh's continued EMI payments for the loan, Ineedtrip refused to refund the money. They also skipped responding to the consumer forum's notices. Unimpressed, forum members Praveen Kumar Jain and RP Singh passed an ex parte order, declaring Ineedtrip's actions a clear 'deficiency in service' under the Consumer Protection Act. Live Events Now, the travel agency must refund the Rs 1.9 lakh within 45 days, plus 6% interest from the date of the order until the amount is paid. To top it off, they've been ordered to shell out Rs 5,000 more for Singh's legal costs and mental agony. Economic Times WhatsApp channel )
Time of India
5 hours ago
- Time of India
UK's visa crackdown leaves city of London immigrants in limbo
One banker in the City of London is faced with paying an extra £40,000 a year in university fees for his children. Nursing homes are worried about finding enough caretakers for residents. The insurance industry says overseas relocations have now ground to a halt. Such is life in the UK after the government announced it would now take ten years for immigrants to receive preferential status known as indefinite leave to remain, or ILR. That's twice the time it used to take. 'Ten years is a very long time to spend without certainty,' said Louise Haycock, partner at the immigration services firm Fragomen, who has been fielding frequent requests from businesses on the matter. 'The UK already has one of the most expensive immigration schemes.' by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Experience next-level CPAP comfort with Resmed AirSense 11 ResMed Buy Now Undo The government, which is still finalizing the changes, is attempting to navigate public pressure to tackle the number of people arriving in the country, as the right-wing populist Reform party gains ground in local and parliamentary elections. It's too soon to say whether the plans will apply retroactively to those already in the country, immigration minister Seema Malhotra said this week. (Join our ETNRI WhatsApp channel for all the latest updates) Net migration to the UK quadrupled between 2019 and 2023. While official data suggests this rise is reversing as the post-Covid spike in foreign students ends and European Union citizens face more hurdles to move, the government is keen to drive the decline further. The rules are also tightening for those who wish to bring family members when they move. Live Events You Might Also Like: UK hubs for exploited migrant carers are of little help The most obvious businesses hit by the crackdown are care homes, which rely heavily on workers from abroad. Under proposals set out by the Labour government after May's local elections, overseas recruitment in the care sector will end within months, reversing an exemption introduced in 2022. The charity Care England described the decision as a 'crushing blow to an already fragile sector.' Operators say funding pressures prevent them from offering higher salaries, meaning the jobs often only appeal to overseas workers. The government has said employers will be able to hire migrants who are already in the UK until 2028. Other sectors are concerned by the changes. Pharmaceutical companies, for example, face extra paperwork and costs that could restrict scientists moving to the UK. The hospitality industry also depends on attracting workers from abroad, who will find it tougher to qualify for skilled worker visas under the new, higher pay threshold. You Might Also Like: A UK industry is still able to hire foreign workers under visa clampdown One large multinational British company is anticipating the changes to immigration rules will raise costs for its staffing moves, according to a person familiar with the matter, who asked not to be named given the sensitivity of the topic. Despite the likely financial impact, the person said the company didn't plan on raising the issue with the government and will instead absorb the additional expense. City Fears In the City of London, whose banks, law firms and professional services firms have long drawn skilled workers from overseas, there's rising anxiety. One City worker, who requested anonymity, is considering a move to Dubai or the US in order to fund his child's increased university fees and said he felt cheated by the changes the government is making. You Might Also Like: UK tightens student visa rules: Shorter stays, stricter checks, fewer perks Some individuals relocated to the UK to enable their children to study at British universities. Yet parents without settled status will now face as much as £50,000 in annual international fees, instead of £9,535 in domestic fees. 'We've got people that are in the UK who are coming to us and saying, 'I've been in the UK for three and a half years, I've made it my home, my kids are in school, I pay my taxes, I want to buy a house. But I can't now because I don't know if I'm going to be able to get a mortgage in five years time if I'm going to have to wait another six, seven years for ILR,'' said Seema Farazi, global immigration leader for government affairs and financial services at EY. The headline measures announced by the government to restrict immigration were not helping the UK's image with high-skilled migrant workers, she added. 'We have seen a lot of people who are looking at alternative options in different parts of the world.' As well as the extra years waiting for settled status, foreign bankers are also facing higher taxes relative to other global financial hubs, the end of the non-dom status that might have shielded their overseas wealth from UK tax and increasingly squeezed public services. One London employee at a major international investment bank, who spoke to Bloomberg on condition of anonymity, said she was now concerned about her position in the UK. She'd bought a house after relocating from Asia, in the confidence that she'd have permanent residency within five years and would be able to apply for a new job if she lost her current one. But she said in a fiercely competitive industry, it was far from clear that anyone would keep their role for a decade. Had she known it might be that long before she would gain settled status, she said she would not have come to the UK. Companies will also need to pay the UK's £1,000 annual immigration skill charge for five additional years until workers become settled. Large international banks are expected to largely absorb the increased bureaucratic burden but the task won't be feasible for every firm. Smaller firms will be particularly hard hit by the reforms, said Craig Beaumont, executive director of the Federation of Small Businesses, in a speech in May. 'Small business owners are not immigration officers,' he said. 'To attract and retain experienced international talent, we need to have access to long-term visas that are compatible with families moving to the UK,' said Arabella Ramage, legal and regulatory director at the insurance trade body Lloyd's Market Association. The organization expects 260,000 skilled people to leave the insurance industry by 2035, based on the ages of workers. Details of the immigration policy are still being finalized, and the government has said it will allow some people to qualify for ILR sooner, based on criteria yet to be decided that could measure immigrants' economic contribution. 'It's just another burden and it's clamping down on using highly skilled individuals,' said Richard Harris, chief legal officer at recruitment agency Robert Walters Group. Uncertainty is palpable, even for those already in the country. It's clear the government's intention is trying to find different ways they can make immigration more difficult, according to immigration barrister Catherine Taroni. 'The white paper itself is very broad. It's quite all encompassing,' she said.
Mint
6 hours ago
- Mint
India's second richest person, Gautam Adani, drew THIS much pay in FY25 — see how he compares to peers
The FY25 remuneration of billionaire industrialist, Gautam Adani (62), who is the second richest person in India, was 'lower than most industry peers and his own key executives', according to a PTI report on June 8. India's second richest person drew from two out of the nine listed companies from his conglomerate. Notably, Gautam Adani is worth $82.5 billion, according to the Bloomberg Billionaire Index, and is also ranked 20th on the publication's 'World's Richest List' for 2025. Gautam Adani recieved a total remuneration of ₹ 10.41 crore in FY25 (fiscal year ended March 31, 2025), PTI reported citing the group companies' latest annual reports. In FY25, Gautam Adani got: ₹ 2.54 crore — comprising of ₹ 2.26 crore salary and ₹ 28 lakh perquisites — from Adani Enterprises (AEL), besides 2.54 crore — comprising of 2.26 crore salary and 28 lakh perquisites — from Adani Enterprises (AEL), besides ₹ 7.87 crore — comprising of ₹ 1.8 crore salary and ₹ 6.07 crore commission — from Adani Ports and Special Economic Zone (Adani Ports or APSEZ). This is 12 per cent more than the ₹ 9.26 crore total package he drew from AEL ( ₹ 2.46 crore) and Adani Ports ( ₹ 6.8 crore) in the previous fiscal year (FY24), the report added. Notably, just like other promoters, Gautam Adani also earns from dividends that the group companies may pay on earnings every year. Reportedly, Gautam Adani's package is comparitively lower than most other peers or head of large family-owned conglomerates in India. Reliance Industries's Chairman Mukesh Ambani has not been taking pay since the COVID-19 pandemic in 2019. Prior to that he had capped his package at ₹ 15 crore. 15 crore. Bharti Airtel's head Sunil Bharti Mittal drew ₹ 32.27 crore in FY24 (as FY25 annual report yet to be released), 32.27 crore in FY24 (as FY25 annual report yet to be released), Bajaj Industries' Rajiv Bajaj got ₹ 53.75 crore in FY24 (as FY25 annual report yet to be released), 53.75 crore in FY24 (as FY25 annual report yet to be released), Hero Motocorp's Pawan Munjal saw ₹ 109 crore pay in FY24 (as FY25 annual report yet to be released), 109 crore pay in FY24 (as FY25 annual report yet to be released), Infamous for his 90-hour work week remark, L&T Chairman SN Subrahmanyan recieved ₹ 76.25 crore in FY25, and 76.25 crore in FY25, and Infosys CEO Salil S Parekh drew ₹ 80.62 crore in FY25. Notably, these numbers do not include earning from dividends paid. The report noted that the salary earned by Gautam Adani is also lower than at least a couple of chief executives of his group companies. AEL CEO Vinay Prakash got ₹ 69.34 crore — including ₹ 4 crore salary and ₹ 65.34 crore in perquisites, allowances and variable incentives 'for exceptional operational and financial performance in the mining services and integrated resources management business of the company'. 69.34 crore — including 4 crore salary and 65.34 crore in perquisites, allowances and variable incentives 'for exceptional operational and financial performance in the mining services and integrated resources management business of the company'. Renewable energy firm Adani Green Energy's (AGEL) MD Vneet S Jaain got ₹ 11.23 crore, while Group CFO Jugeshinder Singh earned ₹ 10.4 crore in FY25. 11.23 crore, while Group CFO Jugeshinder Singh earned 10.4 crore in FY25. Son Karan Adani received ₹ 7.09 crore from APSEZ, while the company CEO Ashwani Gupta earned ₹ 10.34 crore. Variable pay for FY25 in both Karan and Gupta's case will be disbursed in FY26, the annual report said. 7.09 crore from APSEZ, while the company CEO Ashwani Gupta earned 10.34 crore. Variable pay for FY25 in both Karan and Gupta's case will be disbursed in FY26, the annual report said. Younger brother, Rajesh earned ₹ 9.87 crore from AEL while his nephew Pranav got ₹ 7.45 crore. His other nephew Sagar took home ₹ 7.50 crore from AGEL. 9.87 crore from AEL while his nephew Pranav got 7.45 crore. His other nephew Sagar took home 7.50 crore from AGEL. City gas arm Adani Total Gas CEO Suresh P Manglani was paid ₹ 8.21 crore in remuneration for 2024-25 and Adani Energy Solutions CEO drew ₹ 14 crore salary. 8.21 crore in remuneration for 2024-25 and Adani Energy Solutions CEO drew 14 crore salary. Adani Power CEO SB Khayalia drew ₹ 9.16 crore salary in FY25. (With inputs from PTI)
