List of Auto Ancillary Stocks (2025)

What is Auto Ancillary?

Auto ancillary stocks represent companies that manufacture and supply components and parts required for automobile production. These companies act as important suppliers to vehicle manufacturers (OEMs). They produce items that include engine parts, batteries, electronic systems, and components designed for electric vehicles. The stocks in this sector include large-cap companies as well as small-cap auto ancillary firms that remain less known but hold significant growth potential.

Overview of the Auto Ancillary Sector

How to Invest in Auto Ancillary Stocks?

Here is how you can invest in the best auto parts stocks:

1. Open a demat/trading/stockbroker account. You can open a demat account with smallcase!
2. Conduct thorough research into the top auto ancillary stocks in India using Tickertape Stocks Screener. The screener offers over 200 built-in filters, allowing investors to select parameters and generate an auto ancillary stock list.
3. Place a ‘Buy’ Order on the top auto ancillary stocks that align with your investment thesis.

GST 2.0 Impact on Auto Ancillary Sector

• Auto Ancillaries at 18%:A single 18% GST now applies to most auto parts and consumables. This makes repairs and servicing cheaper, while also reducing costs for manufacturers.
• Uniform Slab: Many components carried 28% earlier (with some at 18%), GST 2.0 standardises most auto parts and consumables at 18%. With one common tax rate, confusion over product classification and billing errors is reduced.

Advantages of Auto Ancillary Stocks

• Growth from Vehicle Production: As India produces more vehicles, auto ancillary companies see higher demand. They supply parts like engines, electronics, and suspension systems to manufacturers. Rising vehicle production boosts their revenues.
• Sector Diversification: Auto ancillary stocks give investors a chance to be part of the automotive world beyond sectors such as IT, banking, or FMCG. This adds mix and balance to investment portfolios.
• Opportunity from EV Transition: The rise of electric vehicles also opens new avenues. Components such as batteries, electric motors, and charging stations are in growing demand. Forward-thinking auto ancillary firms stand to gain from this shift.
• Exports Potential: Many manufacturers in the auto ancillaries sector export their products globally. Export sales generate income independent of the local market and provide protection against economic ups and downs in India.

Risks Associated with Investing in Auto Ancillary Stocks

• Cyclical Nature: The automotive sector is cyclical. Economic slowdowns, rising fuel prices, or lower vehicle demand can reduce production, impacting auto ancillary revenues.
• Raw Material Dependence: High dependency on metals, plastics, and other raw materials can expose auto ancillary companies in India to price volatility. Rising input costs may compress profit margins if not passed to OEMs.
• Technological Disruption: The EV transition also carries risks. Companies that fail to adapt to new technologies (like EV components or smart electronics) may lose market share to competitors.
• Regulatory and Policy Risks: Changes in government policies, emission norms, or import/export regulations can affect costs, demand, or operational flexibility for auto ancillary companies in India.

Factors to Consider Before Investing in Auto Ancillary Stocks

• Company Fundamentals: Company fundamentals include revenue growth, profitability, debt levels, and cash flow. Strong balance sheets give auto ancillary firms resilience during industry volatility.
• Client and Product Diversification: Client and product diversification reduces risks when firms serve a broad client base and offer multiple products. This lowers exposure to losing a single client or product segment.
• Technological Adaptation: Technological adaptation becomes important when companies invest in EV components, advanced electronics, and automation. These areas align with emerging industry trends.
• Industry Trends: Industry trends such as vehicle production forecasts, EV adoption rates, and export opportunities directly impact company performance in the sector.
• Valuation: Valuation reflects in metrics like price to earnings and price to sales ratios. These metrics influence considerations about companies even when fundamentals remain strong.