New Delhi. The domestic auto parts business is expected to grow 10 to 15 per cent year-on-year in FY2023.
According to India Ratings and Research, the growth of components business is slowing down in FY23 as compared to FY22 due to rising raw material cost. This business is expected to grow by 20-25 per cent on an annual basis in FY22.
Acceleration in production by original equipment makers and continued growth in export demand is giving impetus to the parts business.
The agency said that the increase in raw material cost in FY22 will continue in the next financial year also. Apart from this, the growth in sales in the medium and heavy commercial vehicles category will also continue in the next financial year.
In FY23, profit in component business is expected to be almost flat or there is a slight increase in it. Supply constraints, rising logistics costs due to rising fuel prices and rising commodity prices will lead to higher operating costs and higher capital expenditure.
The performance of this sector will also be affected by the next wave of corona and rapidly changing geopolitical conditions.
Research and development, technology agreements and acquisitions will continue in this area.
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