20 - 08 - 2026

Auto component makers eye ₹9,000-10,000 crore lightweighting opportunity by FY31

Indian auto component makers are eyeing a ₹9,000-10,000 crore addressable market in lightweighting products by financial year 2031 (FY31) as tighter fuel-efficiency requirements, increasing vehicle content and rising exports expected to create new growth opportunities.

This includes broader addressable market for products such as control arms, links, torsion beams and subframes, according to a report by brokerage firm Equirus Securities.

Lightweighting is the process of reducing a vehicle’s overall weight without sacrificing its structural strength, structural integrity, safety or performance.

Tighter Corporate Average Fuel Efficiency Phase 3 (CAFE 3) fuel-efficiency requirements are expected to increase original equipment manufacturer (OEM) focus on lightweighting, providing a structural tailwind for the segment.

For instance, Sharda Motor Industries is targeting around 15 per cent market share in the segment and sees potential to generate ₹1,400-1,500 crore in revenue. This is a 4-5-fold increase from around ₹300 crore currently, it said.

Sharda Motor has also partnered with Donghee to strengthen its design and engineering capabilities and jointly pursue advanced lightweighting products, including subframes and torsion beams, with a focus on technology transfer and localisation.

The company has secured export orders worth about ₹120 crore annually, with the business expected to reach peak revenue contribution by FY29. It is also evaluating an independent entry into the medium and heavy commercial vehicle segment and has entered the premium two-wheeler emissions segment, which it estimates has an addressable market of ₹150-200 crore.

The growth opportunity is also visible in automotive lighting, with Lumax Industries expecting revenue growth of about 20 per cent in FY27 and more than 20 per cent in FY28, while targeting a 15-20 per cent compounded annual growth rate (CAGR) through FY31.

Lumax’s revenue is expected to reach about ₹9,000 crore by FY31, supported by an order book of about ₹2,500 crore, of which nearly 90 per cent comprises LED lighting. About ₹1,500 crore, or 60 per cent of the order book, is expected to enter production by FY28.

Average passenger-vehicle content for Lumax currently stands at ₹15,000-20,000 per vehicle and is expected to rise by 40-50 per cent over the next two years, driven by the adoption of newer and higher-value lighting technologies, it added.

Heavy forgings revenue to rise

In heavy forgings, Happy Forgings sees revenue potential of around ₹2,000 crore within three years of commencement of commercial production, expected in FY29. The company has already invested around ₹500 crore and plans to invest another ₹1,000 crore based on orders received.

It has secured data-centre-related orders from Cummins and Caterpillar, with realisations of about ₹800-1,000 per kg. The company expects gross margins of around 65 per cent for forged crankshafts and 80 per cent for machined crankshafts, with nearly half of the gross margin expected to translate into EBITDA margins.

Happy Forgings also expects its passenger-vehicle business to contribute 12-15 per cent of revenue over the next 3-4 years, while industrial applications are expected to account for 35-40 per cent, indicating increasing diversification beyond traditional commercial-vehicle and farm segments.

Transmission and driveline components are another emerging growth area. Divgi Torqtransfer Systems sees significant headroom in India’s all-wheel-drive and four-wheel-drive market, where penetration is currently below 5 per cent compared with about 40 per cent in the US.

The company’s addressable market for rear-wheel-drive sports utility vehicle (SUV) and pickup-truck automatic transmissions is about 150,000 units, with Divgi targeting 50,000 units that could translate into around ₹500 crore of revenue. The opportunity would require additional capex of ₹100-200 crore, with production expected to begin from the second half of calendar 2028.

Exports are also emerging as an important growth lever. Divgi is targeting component exports of about ₹80 crore in FY27 against ₹23 crore in Q1FY27, while it expects exports and international operations to eventually contribute 30-40 per cent of revenue.

Kross Ltd is targeting revenue of about ₹850 crore in FY27, supported by sustained demand across the trailer and tractor segments, ramp-up of new products and capacity expansion.

The company has commissioned its axle-beam extrusion plant, with commercial production scheduled to begin in August 2026. Kross expects to be the first company in India to adopt the extrusion process for trailer axle beams and plans to charge a 2-3 per cent premium for the product.

Kross’s exports currently account for around 4.5 per cent of revenue and are targeted to rise to about 10 per cent over the next two to three years. Export margins are higher at about 18 per cent EBITDA.

Uniparts India expects FY27 growth to be a few percentage points higher than the 21 per cent achieved in FY26, with construction equipment, which currently contributes around 45 per cent of revenue, remaining the key growth driver.

The company has a new-business order book of more than ₹225 crore, with about 35 per cent related to large agriculture products and another 35 per cent to construction equipment.

Tyre: rising input a challenge

On the tyre side, rising input costs remain a near-term challenge. Natural rubber prices are currently at a two-year high and raw-material costs are expected to increase 8-10 per cent sequentially in Q2.

CEAT has taken a 4-5 per cent price hike in July and plans another 2-3 per cent increase in August. Cumulatively, it has taken around 10 per cent price hikes in the replacement market through July, while implementing around a 10 per cent price increase for OEMs in Q2.

Higher freight costs are also weighing on CEAT’s international business, with freight rates having risen around 2-3 times and customers deferring deliveries, the report said.