Auto ancillary stocks in focus: India to play big role in global supply chain, says Asit Bhandarkar

India’s auto ancillary pack is stepping out from the shadow of original equipment manufacturers, with investors increasingly betting that component makers could be among the biggest winners of the next phase of automotive growth. The trigger, according to JM Financial Asset Management’s Asit Bhandarkar, is a powerful mix of global supply-chain disruption, rising export competitiveness and a faster-than-expected electrification cycle.

Speaking on the outlook for the sector, Bhandarkar in an exclusive interview to BTTV said the “broader theme is one which is global,” arguing that war-led disruptions have hampered production across markets and positioned India as “a reliable supplier.” That shift, he suggested, is beginning to materially alter how investors view listed auto component companies such as Samvardhana Motherson and Sona BLW.

India’s export edge sharpens

The investment case rests not just on domestic demand, but on India’s growing relevance in global manufacturing networks. Bhandarkar said the weakening rupee has made Indian suppliers “fairly competitive now versus some of our peers in exports,” while adding that technology capability was never the constraint.

That matters because auto ancillaries typically benefit when global automakers diversify sourcing beyond traditional manufacturing hubs. In the current environment, resilience, cost competitiveness and execution reliability are becoming as important as scale.

EV transition opens a second growth engine

The bigger structural kicker may be electrification. Bhandarkar said geopolitical disruption has also “triggered an acceleration in electrification,” creating demand not only from internal combustion engine vehicles but also from the rapidly expanding EV ecosystem.

His argument is straightforward: EV-linked opportunity offers “multiple kind of a growth” because the base is still small, making percentage expansion far sharper. For ancillary makers with exposure to drivetrain systems, precision components and globally integrated platforms, that can translate into a longer earnings runway than the broader auto cycle may suggest.

Beyond OEMs, a broader market story

The backdrop is also supportive. In the wider market conversation, Bhandarkar pointed to strong consumption trends, helped by earlier GST cuts, and improving confidence in pockets tied to discretionary demand. That creates a dual tailwind for auto component makers: domestic vehicle demand remains healthy, while export-oriented suppliers gain from global realignment.

The key investor task now, he indicated, is stock selection. “We are trying to see which of these ancillaries sort of meaningfully benefit out of these opportunities,” he said. But on the bigger picture, his message was unambiguous: “India is going to become more and more part of a global supply chain for all the auto companies in the world.” For the market, that may be the clearest signal yet that auto ancillaries are no longer just a derivative OEM trade, but a structural theme in their own right.