India Infoline has initiated buy rating on Bharat Forge, Apollo Tyres, Exide Industries and Motherson Sumi in its research report dated March 17, 2010.
Indian Auto Component manufacturers have registered an improved financial performance in the past couple of quarters on the back of higher volumes arising from the domestic market. Cost cutting initiatives, improved productivity and better financial management during the meltdown (Q3 FY09-Q1 FY10) provided additional traction to their financial performance. We believe the momentum is expected to continue based on the following factors:
- Strong domestic demand for automobiles
- Replacement demand gaining traction
- India emerging as automobile manufacturing hub
- Rising automobile component sourcing from India
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