Chennai: After reeling under the impact of global recession, auto component makers are showing first signs of clawing back on the back of robust automotive sales. Consequently, stocks of auto component companies are catching the eye of investors. Banco Products, Subros, MRF touched their 52-week highs on the BSE on back of huge traded volumes, while other counters witnessed robust trading on Wednesday. Speaking to The Times of India, Surinder Kapur, CMD of Sona Koyo Steering, said, “The component industry seems to getting back on track after the slump which started in early 2008. However, it will take a few more months of continuous growth to see us get back into making fresh investments. Besides, we also need to see if this auto growth is sustainable. The industry is improving, but we are still not out of the woods, atleast not yet.” According to dealers, investors are lapping up stocks of component makers in the bourses. “Banco has risen by a smart 24% plus in three trading sessions, while Subros has gained more than 17%, Jay Bharat Maruthi (12%), MRF (11%) and Sona Koyo (10%). These are all happening on the back of huge volumes. There is genuine investment demand which is propelling auto component stocks,” dealers said. For instance, Banco which has a 2-week average daily volume of 2.90 lakh shares witnessed a sharp jump on Wednesday at 15.12 lakh shares on BSE. Ditto with Subros, from 1.78 lakh to 11.23 lakh, Jay Bharat Maruthi from 17,186 to 1.01 lakh. “What we are seeing today is a cyclical phenomenon. As always, pre-Diwali sales are robust and therefore the orders. Since this growth comes on the back of a recession year, there is a lot of euphoria that is getting built up. We need to see if this uptick continues,” Koshy Varghese, executive VP, marketing, MRF, said. Besides, another reason why component makers are still cagey about the revival story is that the export demand has not picked up. “The export of components are still very poor. That excess export capacity is lying unutilised for most manufacturers. We are all waiting and watching the situation as of now,” Sona’s Kapur said.
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