Auto component suppliers are expected to log an 8-10 per cent growth in revenue this fiscal driven by healthy demand from domestic original equipment manufacturers (OEMs) and pent-up demand from the aftermarket, according to a report.
However, rating agency ICRA in the report said headwinds persist on the exports front for the auto component suppliers.
For the first half of the current fiscal, the industry reported a year-on-year growth of 29 per cent, ICRA said on Monday, based on projections from 49 auto ancillaries with aggregate annual revenues of close to Rs 3,00,000 crore.
The export orders have slowed down in the last few months, impacted by inflationary pressures, geopolitical tensions, and supply-chain issues.
"Domestic original equipment manufacturer (OEM) demand constitutes almost 50 per cent of sales for the Indian auto component industry. This is likely to remain healthy in FY2023, with double-digit growth expected in both passenger vehicle and commercial vehicle segments," said Vinutaa S, Vice President and Sector Head at ICRA.
Further, according to ICRA, demand for public and private transport is expected to remain healthy with an increase in mobility, supported partly by the reopening of schools and offices.
This, along with steady freight movement, is likely to aid replacement volumes in the near-term, among other factors, it stated.
