Auto component industry likely to see 5-7% CAGR over fiscals 2020, 2021: Crisil

28 Aug 2019 Evaluate

Credit rating agency Crisil in its latest report has said that India’s automotive components industry is projected to log a lower 5-7 percent compounded annual growth rate (CAGR) over the fiscals 2020 and 2021 as compared to 12 percent in the previous two fiscals, on the back of the ongoing slump in the demand for vehicles. Besides, it said that the industry's topline growth is likely to recede to half in the next two fiscals, though tighter safety and emission norms for original equipment makers (OEMs) could give partial respite to the Rs 3.5 lakh crore industry.

The rating agency also revealed that capital expenditure spend will be discretionary and could be around 15 percent lower at Rs 12,000 crore in fiscals 2020 and 2021, compared with the preceding two fiscals. It also said that the upcoming safety and emission norms will boost demand for components like airbags, engine systems, exhaust management systems, and electronic and electrical parts. It noted that these new regulations alone are expected to account for 25-30 percent of the incremental demand for automotive components in the next two fiscals. It added that the growth in fiscal 2020 and 2021 would be even lower, but for the higher component intensity resulting from the regulatory changes, besides steady aftermarket sales and healthy exports.

According to the report, the production volume of the OEMs is estimated to either register a year-on-year decline or log low single-digit at best in the next two years. It also noted that higher insurance costs, lower availability of finance and low growth in rural wages is affecting off-take in fiscal 2020. Vehicle demand is also expected to be impacted by the new safety norms for passenger vehicles and two-wheelers, applicable in fiscal 2020, and the Bharat Stage (BS) VI emission norms, which would come into force from April 1, 2020, as these will drive up vehicle prices across categories. As per to Crisil, these factors are affecting new vehicle sales and in turn causing an impact on the automotive component sector, as OEMs account for 65 percent of component demand.

Create stable, long-term investment portfolio with strong, consistent stocks.

Start Research-backed Investing ...Now. Subscribe to Sapphire

About MoneyWorks4Me

MoneyWorks4Me is a SEBI-registered Investment Adviser (IA) dedicated to helping investors build long-term wealth through transparent, research-driven, conflict-free guidance. Founded in 2008, we started our journey as a Research Analyst (RA), providing deep fundamental analysis, intrinsic value insights, and long-term investing frameworks for Indian equities. In 2017, we transitioned to a full-fledged SEBI-registered Investment Adviser, strengthening our commitment to acting as a fiduciary—always putting the investor’s interest first.

Our Vision

To become India’s most trusted, research-powered fiduciary advisory platform—where every investor, regardless of experience, can make calm, confident, and well-reasoned investment decisions.

What Makes MoneyWorks4Me Different

Fiduciary-first advisory model.
As SEBI-registered IAs, we are legally and ethically bound to act in the best interests of our clients. We do not sell or distribute any financial products. This ensures our guidance is 100% unbiased and conflict-free.
Deep fundamental research + robust valuation discipline.
Built on more than 15 years of equity research, our framework combines quality assessment, intrinsic value estimation, and a sensible margin-of-safety approach.
Process—not predictions.
We don’t rely on guesswork or market timing. Instead, we focus on asset allocation, risk management, and long-term compounding.
Technology + Human Intelligence.
We believe a combination of both is essential for investing success. We constantly innovate and upgrade in-house tools, financial X-rays, and portfolio analytics so that our team of analysts and advisors are equipped with the best.
Partner with Clients.
We follow a DIWM (Do-It-With-Me) approach where we partner clients in setting goals, financial planning, educating on our investing process and share decision-enabling resources transparently with our clients who retain control on execution.

Our Approach: Ensuring compounding work its magic on client portfolio.

MoneyWorks4Me ensures this through:

Investing in stocks, mutual funds, debt, and gold
Quality-at-Reasonable-Price way of investing in stocks
Constructing Direct Stock Portfolios with Core, Booster, and Amplifier stocks
A Mutual Fund Portfolio that delivers consistent out-performance and meaningful diversification (low overlap)
Periodic review and rebalancing
Clear Buy-Sell-Hold, and Position-sizing frameworks

Name of the IA registered with SEBI:	The Alchemists Ark Pvt. Ltd.
Logo:
Trade/Brand Name of IA:	MoneyWorks4Me Investment Advisers
Brand Logo:
SEBI Registration Number:	INA000013323 Validity – May 16, 2019 – Perpetual
Registration:	Non-Individual
BSE Enlistment No:	1187
Address:	B-101, Signet Corner Building, Balewadi Phata, Baner, Pune, Maharashtra 411045
Compliance officer Details:	Name: Shrikant Jagtap Email: shrikant.jagtap@moneyworks4me.com Telephone: +919860359463 Address: Same as IA
Grievance Officer Details:	Name: Mukta Vaze Email: mukta.vaze@moneyworks4me.com Telephone: +91 98609 19463 Address: Same as IA
Principal Officer Details:	Name: Atharva Bhide Email: atharva.bhide@moneyworks4me.com Telephone: +91 91758 99463 Address: Same as IA
Standard Warning:	Investment in securities market are subject to market risks. Read all the related documents carefully before investing.
Disclaimer:	Registration granted by SEBI, enlistment with exchange and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.