Auto ancillary scrips shift to top gear

The auto ancillary scrips have been major gainers in the past one month, with the top five gainers registering average returns of about 50 per cent. With Indian players competing with the global peers in the industry, the domestic auto ancillary sector is said to be growing by about 25 per cent per annum.

Vikram Kotak, President, Techno shares and stocks, said: "The industry has witnessed excellent growth in the past and is poised for larger growth. The valuations are quite comfortable and with the growing global expansion and domestic demand, it is rated as one of the best sectors."

Bharat Forge is one of the largest auto ancillary companies in the world, catering to the auto majors in Europe. The scrip gained significantly powered by its aggressive aquisitions of many companies in the US as well as Europe.

According to a industrial rating research by Crisil, the auto ancillary industry is estimated to have grown above 20 per cent in the past. The growth was led by the strong domestic growth posted by almost all the segments of the automobile industry and high growth in exports.

"The growth in passenger cars and utility vehicles augmented the growth of the allied industry in the domestic market while heavy growth story in the export front gave a tremendous boost to the sector in terms of growth.

The exports have seen to have grown by 25-30 per cent in the past many years. Increased outsourcing of components from India by global Auto majors have also helped the industry," said an analyst with a domestic brocking firm.

The scrips that gained the most in the past one month were Jagan Lamps which gained over 82 per cent, ANG Exports (55 per cent), Atul Auto (51 per cent), Remsons Industries (46 per cent), Gajra Bevel Gears (45.74). The major players in the sector have also gained significantly in this period.

Bharat Gears gained over 25 per cent, Amtek India (38 per cent), Motherson Sumi Systems (11 per cent), Precol (7 per cent), Exide Industries (11 per cent), Sundaram Clayton (8.61 per cent) and Bharat Forge (8 per cent).

The sector has also posted huge appriciation in the last one year period. The major gainer was ANG Exports, which posted an appreciation of over 4650 per cent from Rs 2.2 to Rs 100.

The company was recently in news after its subsidiary tied up with a Chinese auto components maker to manufacture automobile parts for the domestic as well as overseas markets.

Other major gainers in the last one year were Rishi Laser Cutting up 1516 from Rs 10.10 to Rs 163.30, Talbros Automotive Components up 842 per cent from Rs 15.02 to Rs 141.69 and Triton valves up 588 per cent from Rs 281 to Rs 1935.30.