Auto Ancillary Stocks in Focus as US Eases Tariffs

Auto ancillary stocks are expected to remain in the spotlight during Monday’s trading session on February 9, as Indian auto component manufacturers may receive export-side relief after the United States agreed to continue preferential tariff treatment on certain automotive parts.

As per a joint India–US announcement, New Delhi will obtain a preferential tariff-rate quota for auto components that fall under the existing duties. The move is being viewed as an important step toward regaining price competitiveness for Indian suppliers and adding stability to trade in a segment that has faced sustained pressure from elevated levies.

SAMIL earns close to 19 percent of its revenue from the US and also operates subsidiaries there, although uncertainty around the split between exports and domestic production restricts precise evaluation of the benefit. Sona BLW Precision Forgings, where North America accounts for nearly 41 percent of turnover, may gain at the margins, even though its manufacturing base in the US softens the impact of tariff swings.

Uniparts India looks among the most exposed, with roughly 55 percent of revenue tied to the US market, meaning any reduction in tariff-related hurdles could aid demand visibility and margins despite the lack of clarity on export proportions.

Auto Ancillary Stocks Bharat Forge, which receives around 22 percent of sales from the US and more than one-third of revenue from the Americas, could profit from stronger competitiveness, although its two production facilities in North America already provide partial insulation from tariff stress. Happy Forgings, with about 5 percent of overall revenue coming from the US, may also witness limited upside from smoother cross-border trade flows.

Divam Sharma, Co-Founder and Fund Manager at Green Portfolio PMS, remarked, “The reduction is a constructive development for India’s auto industry, particularly component manufacturers, as the US contributes roughly one-fourth to one-third of their export income.”

He added that lower duties ease trade barriers and enhance cost efficiency, improving India’s standing in global OEM supply chains, while the effect on vehicle exporters should remain modest due to their comparatively limited direct exposure.

Over the longer term, Anil Rego of Right Horizons PMS pointed out that the move could further strengthen India’s image as a cost-effective and dependable manufacturing hub for worldwide automotive supply chains.