Auto ancillary stocks shift into top gear, but caution lights on
Auto ancillary companies have generated higher
investor interest
over the past month amid buoyancy in the broader market. However, investors need to be cautious since the sector may face pressure due to muted demand for commercial and passenger vehicle (CV and PV) demand. Of the 22per cent increase posted by the ET-auto ancillaries index in the past three months, 13% was in one month, reflecting improved traction in these stocks.
For a sample of 22 auto component companies, half have posted year-on-year revenue growth in the March quarter in double-digits. However, only eight of them have recorded double-digit growth in net profit. While seven companies posted double-digit growth in operating profit before depreciation and amortization, operating margin expanded for 8 companies.
The two-wheeler companies reported a slower volume growth in the second half of FY25 after a strong growth in the first six months according to Motilal Oswal Financial Services (MOFSL). Tractors was the only segment that witnessed a strong demand recovery.
The automobiles sector saw earnings downgrades for FY26 as margin may take a hit amid rising input costs and tepid growth visibility. 'The recent appreciation of the rupee against the dollar is a key monitorable for exports-focused companies. Given these factors, FY26 is expected to be a year of modest earnings growth for most companies under our coverage,' said MOFSL.
The margin outlook for global original equipment manufacturers (OEM) adds to the uncertainty. According to Elara Capital, top international auto makers including Mercedes-Benz, Porsche and Ford have either downgraded or suspended guidance for 2025, citing tariff risks, market share loss in China, and margin headwinds. This may impact Indian auto parts suppliers with global linkages like Bharat Forge, Sona BLW.
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Hindustan Times
32 minutes ago
- Hindustan Times
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In December, Paraguay expelled Chinese envoy Xu Wei for alleged interference in its internal affairs. During his visit to New Delhi, President Peña held comprehensive talks with Prime Minister Narendra Modi on a wide range of issues. He emphasized that Paraguay produces enough food to feed ten times its own population. The nation possesses an intimate knowledge of the soil, yet remains bereft of technological acumen. Agritech and high-tech collaboration are essential between two aspiring nations. India is a perfect match in advancing its ambition for global food security through such partnerships. Interestingly, Paraguay also produces stevia, a natural sweetener permitted in India; however, Indian importers currently rely mostly on China and the US. There is clear scope for Indian players to tap into Paraguay as a new and reliable source. Paraguay's export portfolio is traditionally reserved to the periphery, with most of its trade directed to China, Brazil, and Argentina. 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Despite being landlocked, Paraguay is crisscrossed by large rivers and generates nearly all its electricity from hydroelectric sources. The Itaipu Dam, a joint operation with Brazil, supplies about 90% of Paraguay's electricity. India's capabilities in riverine and flood data management, as well as weather prediction, could be of immense value to Paraguay's hydro-focused energy sector. Given Paraguay's extensive river systems, there may also be opportunities for India and Paraguay to exchange knowledge or develop initiatives related to riverine connectivity - benefiting from each other's experience as major riverine nations. A member of the Lima Group, Paraguay is a vocal supporter of reforming the United Nations Security Council and other multilateral institutions, including global financial systems. 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Time of India
32 minutes ago
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The Hindu
32 minutes ago
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The U.S. stands strong with India in the fight against terrorism, U.S. Deputy Secretary of State Christopher Landau told Congress MP Shashi Tharoor-led all-party delegation in Washington to convey India's stance on the Pahalgam terror attack and Operation Sindoor. The Indian delegation met Mr. Landau in Washington on Friday (June 6, 2025) as it wrapped up the crucial U.S. leg of its multi-nation tour, briefing key interlocutors about Operation Sindoor targeting terror infrastructure in Pakistan and Pakistan-occupied Kashmir following the April 22 Pahalgam terror attack that claimed 26 lives. 'The all-party parliamentary delegation led by Dr. @ShashiTharoor had a warm and candid conversation with U.S. Deputy Secretary of State Landau. The Indian delegation briefed him on the atrocities of the Pahalgam terror attack and Operation Sindoor,' the Indian Embassy said on X. Mr. Landau, in a post on X, said it was a 'GREAT' meeting with the Indian parliamentary representatives. 'I reaffirmed that the U.S. stands strong with India in the fight against terrorism. We discussed the U.S.-India strategic relationship, including expanding trade and commercial ties to foster growth and prosperity for both countries,' he said. A statement issued by State Department Spokesperson Tammy Bruce said Mr. Landau 'reaffirmed the United States' strong support of India in the fight against terrorism and the strategic partnership between the two countries'. The delegation discussed with Mr. Landau the importance of advancing key areas of the bilateral relationship, including expanding trade and commercial ties to foster economic growth and prosperity in both countries, according to the statement. The embassy in a statement said that during the meeting with Mr. Landau, the delegation briefed him on the heinous terrorist attack in Pahalgam, discussed India's subsequent Operation Sindoor, and put forth India's firm resolve to counter cross-border terrorism in all its forms. 'The Deputy Secretary reaffirmed the United States' strong support for India in the fight against terrorism. The two sides also had a wide-ranging conversation on the importance of strengthening bilateral relationships through advancing cooperation in areas of mutual interest,' it said. The delegation also had a 'productive meeting' with Senator Chris Van Hollen, a member of the U.S. Senate Foreign Relations Committee. The delegation briefed him on the heinous terrorist attack in Pahalgam, discussed India's subsequent Operation Sindoor, and put forth India's firm resolve to counter cross-border terrorism in all its forms, the embassy said on X. The senator sympathised with the victims of repeated terror attacks in India, saying the U.S. stood with India in the fight against terrorism, and expressed support for New Delhi's right to defend itself. Mr. Tharoor also spoke over the phone with Senator Cory Booker, a member of the U.S. Senate Foreign Relations Committee, and described the conversation as 'warm and productive'. He briefed Booker on the 'monstrous' terror attack in Pahalgam and outlined the repeated provocations of terrorism emanating from across the border, laid out the details of Operation Sindoor, and emphasised India's firm resolve in countering any future acts of terrorism. 'Senator Booker unequivocally condemned terrorism and expressed sympathies with the victims. The conversation also touched upon broader themes in the India-U.S. strategic partnership, which enjoys robust support,' Mr. Tharoor said, adding that he hopes to meet Booker 'Next time in person'. Apart from Mr. Tharoor, the delegation comprises MPs Sarfaraz Ahmad, Ganti Harish Madhur Balayogi, Shashank Mani Tripathi, Bhubaneswar Kalita, Milind Deora, Tejasvi Surya, and India's former Ambassador to the U.S. Taranjit Sandhu. Several prominent American lawmakers and congressmen, as well as policy experts, attended a special reception hosted by the Indian Embassy on Thursday (June 5) night and interacted with the delegation.
