Bharat Forge, Sona BLW, other auto ancillary stocks in focus as US offers tariff relief on auto parts

Bharat Forge, Sona BLW, other auto ancillary stocks in focus as US offers tariff relief on auto parts

• US extends preferential tariffs for Indian auto parts, boosting export prospects.
• Sona BLW, Uniparts, Bharat Forge may benefit due to high US-linked revenues
• Lower duties improve cost competitiveness for Indian auto component makers

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Auto ancillary stocks will be in focus in trade on Monday, February 9, as India’s auto component makers are likely to see relief on the export front after the United States agreed to extend preferential tariff treatment for automotive parts.

According to a joint India-US statement, New Delhi will be granted a preferential tariff rate quota on automotive parts that fall under the tariffs imposed. The decision is seen as a key step towards restoring price competitiveness for Indian suppliers and bringing greater stability to trade in a segment that has been under prolonged strain from steep duties.

SAMIL generates nearly 19 percent of its revenue from the US and has subsidiaries there, though the lack of clarity on export versus local production limits precise impact assessment. Sona BLW Precision Forgings, where North America contributes about 41 percent of revenue, could benefit at the margin, even as its manufacturing presence in the US cushions it from tariff volatility.

Uniparts India appears among the most exposed, with around 55 percent of its revenue linked to the US, making any easing of tariff-related barriers positive for demand visibility and margins, despite the absence of a clear export split.

Bharat Forge, which derives around 22 percent of its sales from the US and over a third of its revenue from the Americas, stands to benefit from improved competitiveness, even though it already operates two manufacturing facilities in North America that partially insulate it from tariff pressures. Happy Forgings, with roughly 5 percent of its overall sales coming from the US, may also see marginal upside from smoother trade flows.

Divam Sharma, Co-Founder and Fund Manager at Green Portfolio PMS, said, "The cut is a positive development for India’s auto sector, especially component makers, since the US accounts for roughly a quarter to a third of their export earnings."

Lower duties reduce trade barriers and improve cost competitiveness, strengthening India’s position in global OEM supply chains, while the impact on vehicle exporters remains modest due to their limited direct exposure, he added.

Over time, Anil Rego of Right Horizons PMS noted that this can strengthen India’s positioning as a cost-efficient, reliable manufacturing base for global automotive supply chains.