Goldman Sachs bullish on auto ancillary stocks
Price targets suggest up to 28% upside potential.
1Goldman Sachs initiates auto ancillary coverage
Goldman Sachs has launched coverage on four Indian auto component companies, issuing 'Buy' ratings for Sansera Engineering and Craftsman Automation while maintaining 'Neutral' on Bharat Forge and Samvardhana Motherson. The brokerage anticipates precision engineering and EV transition will drive long-term sector growth.
228% upside seen in Sansera Engineering
Goldman set a Rs 4,130 target for Sansera, citing its aerospace/defense pivot as margin-accretive. Semiconductor wafer equipment demand and Southeast Asia's supply chain opportunities could provide additional upside, with PLI benefits not yet priced in.
3Craftsman's data center opportunity
With an Rs 11,600 target, Craftsman's engine block business is positioned to benefit from global data center expansion. Rising aluminum content per vehicle during EV transition and 'local for global' engine parts strategy present growth catalysts.
4Neutral stance on Bharat Forge, Motherson
Defense growth and commercial vehicle upcycle are already priced into Bharat Forge, while Motherson faces challenges in European/US manufacturing operations. Both stocks received Neutral ratings with minimal upside/downside projections.
5India auto ancillary growth outlook
Goldman projects 7%/12%/10% revenue growth for FY27-29, with EBITDA expected to grow 7%/26%/14%. The shift toward precision machining and diversified end markets should make business models more resilient to cyclicality.
6Key investor takeaways
The report identifies four outperformance drivers: product expansion, segment diversification, geographic reach, and M&A. Precision engineering capabilities and EV-related opportunities are transforming traditional auto component manufacturers into multi-industry suppliers.
Original article: Economic Times — Goldman Sachs otomotiv yan sanayi hisselerine olumlu bakıyor