Latest news with #FrontierSprings
Mint
23-07-2025
- Automotive
- Mint
Auto stocks are surging—even as sales sputter and supply risks rise
Mumbai: India's auto and auto ancillary stocks are on a tear—even as sales sputter and supply chain clouds gather. Some lesser-known auto component makers have posted triple-digit stock market gains in the past three months, eclipsing marquee vehicle manufacturers and defying a cautious outlook for the industry. Shares of Frontier Springs have soared 151%, Lumax Auto Technologies is up 110%, and Kinetic Engineering has gained 90%, outpacing commercial vehicle makers Force Motors's 85% and SML Isuzu's 78% gains. One of the key drivers behind the rally, analysts say, is liquidity. Flush markets and improved risk appetite have lifted not just autos, but other sectors as well. Hopes of a festive season demand rebound, coupled with a potential trickle-down from banks following the Reserve Bank of India's 50-basis-point rate cut, have added to the optimism. Still, it hasn't been a smooth ride for all auto and auto ancillary stocks. Containe Technologies (-28%), Ola Electric (-23%), Atul Auto (-9%), GNA Axles (-11%), and JBM Auto (-9%) have seen corrections over the past three months, while the Nifty Auto index has risen 7.2%. Hyundai Motor India fared better with 26% gains in the past three months, followed by Mahindra and Mahindra (17%), TVS Motor Co. (4%), Bajaj Auto (2%), and Maruti Suzuki India (6%). Some market participants caution that if the expected rate cut transmission to borrowers or retail loan growth fails to play out, auto stocks could be in for a sharp pullback. The current surge is drawing attention because it runs counter to the broader outlook: domestic vehicle demand remains muted, supply chain risks from a rare-earth-magnet shortage are mounting, and analysts warn of earnings pressure in the September quarter if the disruption persists. While some investors see the issue as temporary, others worry the rally may be running ahead of fundamentals. A 15 July report by BNP Paribas showed mutual funds slightly trimmed their overweight position in the auto sector—to 7.7% in June from 8.0% in May. Foreign institutional investor exposure dipped to 6.9% from 7.0% in the same period—but market experts explained that this doesn't necessarily mean FIIs exited auto stocks, and could reflect allocations to other sectors instead. Foreign portfolio investors, meanwhile, pumped in $553 million in auto stocks in June, up from just $11 million in May, according to NSDL data. FPIs were net sellers in the auto sector for nine straight months, from August 2024 through April 2025. Supply chain concerns Rare earth magnet supply remains a key concern. These magnets—critical for both electric vehicles (EV) and internal combustion drivetrain components—are used in electric motors, oxygen sensors, lasers, and a wide array of industrial and medical applications. China dominates this supply chain, and its recent decision to restrict exports of certain rare earth materials has raised alarm across global auto markets. In June, Maruti Suzuki and Bajaj Auto said they had sufficient magnet inventory through July. Kumar Rakesh, analyst at BNP Paribas, said there is no immediate earnings risk from the rare earth crisis, as most companies are believed to have sufficient inventory through July. 'Investors largely expect the issue to be resolved by then," he said, adding that if new model launches get delayed, that could be a warning sign. But concerns persist. On 11 June, Reuters reported that Maruti had slashed near-term production targets for its debut EV, the e-Vitara, by two-thirds due to magnet shortages. Rakesh added that the pressure may not be limited to EVs. 'Even ICE vehicles could feel some pressure," he said, referring to conventional vehicles run on internal combustion engines. Companies are already exploring alternative sourcing options and diversifying supply chains, Rakesh added. 'For now, it looks more like a short-term disruption than a long-term threat." Sourcing under scrutiny In an earnings call on 30 April, Vivek Vikram Singh, managing director and group chief executive of SONA BLW Precision Forgings, flagged near-term supply chain risks. 'In India, while we are working with the industry and the government and the Chinese embassy to speed up the process of importing magnets from China, we're also evaluating alternate materials, including Ferrite, different grades of magnets, different technologies, as well as different supply sources," he said. Singh warned the disruption could hit global auto production in the short term. 'The threat of a rare earth minerals shortage is real, and the impact could be visible in the near term, especially for EVs," said Rajat Chandak, senior fund manager at ICICI Prudential Mutual Fund. He added that alternate sourcing arrangements are being explored, but scaling them will require government support. 'One option available to OEMs (original equipment manufacturers) is to import the entire motor, rather than just the magnets or rare earth minerals," he said. TVS Motor Co., for a second month in a row, flagged a similar concern in its June update, noting that 'magnet availability remains a challenge in the short to medium term". Its EV sales dropped to 14,400 units in June from 27,976 in May. Demand remains sluggish Soft domestic demand is adding to the auto sector's complexity. Growth in FY26 is expected to remain in low single digits across most auto segments, said Arun Agarwal, vice president–fundamental research, at Kotak Securities. Tractors may hold up slightly better than passenger vehicles, but overall momentum is weak, he said. Sales data for the April-June quarter released by the Society of Indian Automobile Manufacturers (Siam) earlier this month showed mixed trends. Passenger vehicle sales crossed the 1 million mark, reaching 1.01 million units, but due to weaker sales toward the end of the quarter volumes declined 1.4% year-on-year. Two-wheeler sales fell 6.2% to 4.67 million units, largely due to inventory corrections across the industry. Three-wheeler sales in the financial first quarter hit a record 165,000 units, up 0.1% year-on-year, driven by the passenger carrier segment. Commercial vehicle sales declined marginally by 0.6% to 223,000 units. 'Looking ahead to Q2, the overall industry outlook remains cautiously optimistic," Siam said. While challenges may persist in the near term, a few positive indicators could support a recovery: the upcoming festive season may lift demand for passenger vehicles and two-wheelers; above-normal monsoons could boost rural income and entry-level vehicle sales; and the Reserve Bank of India's 100-basis-point (bps) rate cuts this year could eventually improve affordability and consumer sentiment. 'However, the supply-side challenges—especially the recent export licensing requirement from China on rare earth magnets—have been a concern for OEMs of all categories," Siam said. Agarwal cautioned that prolonged softness could force automakers to resort to discounting, putting margins under pressure. 'Low volumes hurt operating leverage, putting further pressure on profitability," he said. Earnings on watch Kotak Institutional Equities expects auto companies it covers to report 1% revenue growth for the first quarter, supported by mid-single-digit growth in vehicles and price realization gains, partly offset by deeper discounts and weak global sales. 'We expect Ebitda margins to decline by 210 bps (year-on-year), driven by higher discounts, commodity headwinds (tires), higher advertisement spends and tariff-related hits," the brokerage said in a 2 July report. For auto ancillary companies, the revenue outlook appears slightly stronger. Kotak expects 6.6% year-on-year revenue growth in the first quarter, driven by low- to mid-single-digit growth in vehicles and mid- to high-single-digit gains in replacement segments like tyres and bearings. Tractor-linked volumes are expected to rise in the low teens. However, even ancillaries aren't immune to pressures. Kotak expects Ebitda margins to decline 60 basis points year-on-year due to weaker product mix (batteries), raw material headwinds (tires), and a weaker export mix. The brokerage added that companies with exposure to the global auto market are likely to report weak numbers, given decline in production volumes, especially in the US. Auto makers will begin reporting their June-quarter earnings on 23 July, with Force Motors scheduled to announce first. Investors will be watching closely to see whether earnings justify the recent stock gains—or reveal signs of overreach.
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Business Standard
25-06-2025
- Business
- Business Standard
Microcap stock soars 74% in 1 month, zooms 169% from April low. Do you own?
Frontier Springs share price: Share price of Frontier Springs hit a record high of ₹4,454.10, as the scrip was locked in 10 per cent upper circuit on the BSE in Wednesday's intra-day trade. Around 14,000 shares changed hands on the counter, and there are pending buy orders for 5,367 shares on the BSE, the exchange data showed. Currently, Frontier Springs is trading 'X' group on the BSE. X group classified equity securities of companies that are only listed/traded at BSE. In the past month, the stock price of this Microcap company has surged 74 per cent, as compared to 0.5 per cent rise in the BSE Sensex. It zoomed 169 per cent from its April month low price of ₹1,653 on the BSE. The stock had hit a 52-week low of ₹1,365 on August 8, 2024. Frontier Springs receives orders worth of ₹93 crore The company, on June 2, announced that it has received orders for Air Springs Assembly aggregating to a total value of ₹92.6 crore (inclusive of GST) from Rail Coach Factory, Kapurthala and Modern Coach Factory, Raebareli. These orders reaffirm the company's position as a trusted supplier to the Indian Railways and are expected to be executed over the coming quarters, Frontier Springs said. Frontier Springs outlook Looking ahead, the management said they are extremely optimistic about the company's growth prospects. The company has set ambitious targets of achieving ₹375 crore in gross revenues for FY26 and ₹500 crore for FY27. With robust order book, expanding capacities, and a clear focus on value-added products, Frontier Springs is well-positioned to capture and capitalise on the major railway modernisation initiative being undertaken by the Government of India, the management said. The positive momentum has continued into the start of FY26, with exceptionally strong demand from Indian Railways across all three of the company's core segments—Coil Springs, Air Springs, and Forgings. The ongoing modernisation drive within Indian Railways is providing a significant fillip to Air Springs segment, where the company said they hold firm orders that offer clear visibility of sustained growth. 'At the same time, the sharp increase in production of LHB (Linke-Hofmann-Busch) coaches and locomotives has led to a healthy uptick in demand for Coil Springs. The surge in demand has also enabled spring suppliers like us to improve realisations, which is positively impacting profitability,' the management said. About Frontier Springs Founded in 1981, Frontier Springs began its journey as a manufacturer of Leaf Springs and Laminated Bearing Springs for Automobiles and Railways. Today, the company primarily produces Hot Coiled Compression Springs and forging items, catering especially to the needs of Wagon, Locomotives, and Carriage sectors. Recently, the Company made a strategic foray into the production of Air Springs, marking a significant expansion in its product portfolio.
Business Standard
03-06-2025
- Business
- Business Standard
Frontier Springs gains on Rs 93 crore air spring order
Frontier Springs rallied 8.18% to Rs 3,834 after the company announced it had secured an order worth Rs 92.6 crore from Rail Coach Factory, Kapurthala, and Modern Coach Factory, Raebareli, for the supply of air spring assemblies. The order is scheduled to be executed over the upcoming quarters. Frontier Springs is mainly engaged in the production of L.H.B. Springs and Hot Coiled Compression Springs and Forging items for Wagon, Locomotives and carriages The company's net profit jumped 130.9% to Rs 11.66 crore, while revenue from operations rose 58.8% to Rs 70.08 crore in Q4 March 2025 over Q4 March 2024.
Business Standard
26-05-2025
- Business
- Business Standard
Frontier Springs standalone net profit rises 130.89% in the March 2025 quarter
Sales rise 58.77% to Rs 70.08 crore Net profit of Frontier Springs rose 130.89% to Rs 11.66 crore in the quarter ended March 2025 as against Rs 5.05 crore during the previous quarter ended March 2024. Sales rose 58.77% to Rs 70.08 crore in the quarter ended March 2025 as against Rs 44.14 crore during the previous quarter ended March 2024. For the full year,net profit rose 166.82% to Rs 34.66 crore in the year ended March 2025 as against Rs 12.99 crore during the previous year ended March 2024. Sales rose 70.84% to Rs 231.34 crore in the year ended March 2025 as against Rs 135.41 crore during the previous year ended March 2024. Particulars Quarter Ended Year Ended Mar. 2025 Mar. 2024 % Var. Mar. 2025 Mar. 2024 % Var. Sales 70.0844.14 59 231.34135.41 71 OPM % 23.8916.81 - 21.4715.34 - PBDT 16.807.82 115 50.4121.18 138 PBT 15.786.74 134 46.4017.47 166 NP 11.665.05 131 34.6612.99 167
