Auto Component. Steel. otel. Pesticides. Industry. oal. nking Express Service. Banking. Shipping. Power Generation Pa. Hospital Industry.

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2 periods FY13 and FY14 were the most challenging for the automotive industry in last decade. All the segments in automotive industry (i.e. commercial vehicles, passenger vehicles, two wheelers, three-wheelers and tractors) witnessed significant drop in growth levels. Commercial vehicle goods carriers (GCs) demand was affected the most, as slowdown in the economic activities considerably pulled down the demand. Persistent economic uncertainty finally took the toll on PV domestic volumes in FY14. Prior in FY14, impressive rise in utility vehicle demand kept PV sales afloat; however slip in UV sales this fiscal pull down PV domestic sales. Slowdown in new job creation coupled with rising inflation and spiraling fuel prices considerably constrained PV demand during last two fiscals. Two wheeler (TW) segment was the lone performer in the automobile industry, as it managed to show a modest rise during both FY13 and FY14, mainly driven by healthy growth observed in scooter segment. Sluggish demand in key segments in automobile industry affected OEM demand OEM demand to remain subdued in short term OEM demand constitutes more than 85 per cent total domestic consumption. This segment witnessed a strong growth around 30 per cent in FY11, on the back robust automobile sales. However, slowdown in the growth levels in automobile sales also led to moderation in OEM demand to around 15 per cent in FY12 to around Rs 1,474 bn. Since FY13, OEM demand plunge even further as it dropped by around 8 per cent to around Rs 1,354 bn in FY13. CARE Research estimates OEM demand would continue to remain under strain in FY14, as it is expected to further drop by around 7-8 per cent to Rs 1,262 bn. However, as the economic concerns are expected to fade away in the medium term, vehicle demand will revive gradually, providing support to OEM segment demand. CARE Research forecasts OEM demand to grow at CAGR 3-4 per cent to Rs 1,564 billion by FY18. As imports form substantial portion inputs in automobile manufacturing, uncertainties arising out sharp currency fluctuation are adding to the woes OEMs. Hence, in order to curtail the burden growing import bill almost all global OEMs are resorting to increased local sourcing. auto component manufacturers fer advantages like low-cost and adequate production capacity and ability to absorb advance technological changes. Further, cost cutting drive amongst all major OEMs across the globe has led substantial rise in component sourcing from low cost destinations like India during last 5-6 years. This presents a significant growth opportunity for the domestic manufacturers to become a part the supply chain global OEMs. Investments towards technology have increased significantly for the industry that would benefit component suppliers to reap the benefit indigenization drive among global OEMs

3 Outlook on Auto component industry Section- I CARE Research's Outlook Domestic market to grow at a CAGR 8-9 per cent till FY18 Sluggish demand in key segments in automobile industry affected OEM demand OEM demand to remain subdued in short term Unorganized players would continue to dominate the replacement market Investments towards technology have increased significantly for the industry that would benefit component suppliers to reap the benefit indigenization drive among global OEMs Increase in R&D has also helped in enhancing global footprints through increase in exports Investments around Rs billion are expected in next 2 years Outlook on Pritability Strong growth in exports along with modest support from replacement market helped industry revenue witness a rise Stening in key raw material prices to help industry to bring some respite to domestic component manufacturers in such tough scenario Domestic steel prices to sten owing to sluggish demand scenario Aluminium prices expected to remain firm on the back sharp rupee depreciation Pressure on pritability to pull down industry's return on capital employed (ROCE) Section- II Section Introduction Size Key Component Segments structure and competition Importance to the Economy Government Policies Custom duty Excise duty FDI policy Domestic market Tepid demand for new vehicles led to muted growth for components in FY13 Structure auto component market OEM market Replacement market Trade scenario Exports Market Size and Trend in Exports Key export products Imports Size Imports Key sources Imports Auto component segments Engine component segment Drive transmission and steering segment Body and chassis segment

4 Suspension and braking component segment Equipment segment Electrical component segment Residual segment Cost Analysis Raw Material Cost Steel Rubber Aluminium Employee Cost Selling and distribution cost Research and development cost Credit Prile Operating Margins Net Margins Return on Capital Employed Fixed Asset Turnover Ratio Debt-Equity Working Capital Management Amara Raja batteries Ltd Amtek Auto Ltd ANG Industries Ltd Asahi India Glass Ltd Autoline Industries Ltd Banco Products (India) Ltd Bharat Forge Ltd Bosch Ltd Delphi-T V S Diesel Systems Ltd Denso India Ltd Exide Industries Ltd Federal-Mogul Goetze (India) Ltd Fiem Industries Ltd Gabriel India Ltd GKN Driveline (India) Ltd Jamna Auto Industries Ltd Jay Bharat Maruti Ltd JMT Auto Ltd LG Balakrishnan & Bros Ltd Lumax Industries Ltd Motherson Sumi Systems Ltd Munjal Auto Industries Ltd Munjal Showa Ltd Omax Autos Ltd Rico Auto Industries Ltd SECTION- III Company Section

5 Sona Koyo Steering Systems Ltd Subros Ltd Sundaram Brake Linings Ltd Talbros Automotive Components Ltd Ucal Fuel Systems Ltd Outlook on Pritability Key financial indicators Introduction Auto components- Turnover Trend in Custom Duty on auto components and its inputs (%) Trend in Excise Duty on auto components and its inputs (%) Domestic Market Trend in automobile production Trend in level indigenisation OEMS Trade scenario Region wise key product exports Auto component segments Trend in aggregate key financial parameters for engine components Trend in aggregate key financial parameters for drive transmission and steering Trend in aggregate key financial parameters for suspension and braking component Trend in aggregate key financial parameters for equipments Trend in aggregate key financial parameters for Electrical components Trend in aggregate key financial parameters for residual segment Cost analysis Trend in R &D, Royalties & technical know fees (% sales) Credit Prile Key financial ratios Outlook on Auto component industry Outlook on domestic component market Outlook on segment wise domestic automobile sales Outlook on OEM demand Outlook on replacement market Trend in R&D expenditure for major auto component manufacturers Indigenisation levels in key OEMs Outlook on exports Outlook on investments List s SECTION- I CARE Research's Outlook SECTION- II Section List Graphs SECTION- I CARE Research's Outlook

6 Outlook on Pritability Outlook on sales revenue and margins Outlook on domestic CR coil prices (Rs/tonne) Outlook on domestic aluminium prices (Rs/tonne) Introduction Segmental share in total turnover Segmental share in domestic consumption Domestic Market Trend in consumption domestic auto component Trend in size Replacement market Trend in automobile production vis-à-vis population Trade scenario Auto component exports trend Auto component imports trend Auto component segments Trend in turnover engine components Trend in turnover drive transmission and steering segment Trend in turnover body and chassis segment Trend in turnover suspension and braking component segment Trend in turnover equipments Trend in turnover electrical components Trend in turnover residual segment Cost analysis Trend in raw material cost (% net sales) Annual trend in steel prices Monthly trend in steel prices Annual trend in rubber prices Monthly trend in rubber prices Annual trend in aluminium prices Monthly trend in aluminium prices Trend in Employee cost (% net sales) Trend in Selling and distribution cost Trend in R&D, Royalties and technical know fees SECTION- II Section Credit Prile Trend in operating prit margin Trend in net prit margin Trend in ROCE Trend in Fixed asset turnover Trend in debt equity ratio

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