Samvardhana Motherson, Bharat Forge set to benefit from electronics push, says Jefferies

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Shares of India's auto ancillary firms, led by Samvardhana Motherson and Bharat Forge are tapping into a new growth frontier—electronics manufacturing. Global brokerage Jefferies sees this as a game-changer that could boost their growth outlook and lift valuation multiples.

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Leading the charge is Samvardhana Motherson, which has ventured into mobile glass manufacturing, a move that aligns with rising demand for premium smartphone components. The company has also formed a joint venture with Hong Kong-based Crystan, a supplier to tech giant Apple, marking its deepening play in the electronics supply chain.

Meanwhile, Bharat Forge has set its sights on the server market. The company has partnered with AMD and Compal, key players in the global computing industry, to strengthen its presence in high-performance computing solutions.

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At about 10:20 am, shares of Samvardhana Motherson and Bharat Forge were trading at Rs 127 and Rs 1,088, lower by 0.4 and 0.3 percent, respectively. Samvardhana and Bharat Forge's stock prices have crashed about 18 percent each since the start of the year.

Auto ancillary companies have also been in the news ever since Elon Musk accelerated plans to land Tesla in India. Though Tesla’s India plans are still in their early stages and could take a couple of years to fully unfold, analysts that Moneycontrol spoke to see a massive opportunity for the country’s auto ancillary sector. It’s not just a win for companies already supplying parts to the EV giant—Tesla’s arrival could open doors for many more Indian firms eager to get a slice of the action.

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"It is not just a sentimental boost, this is a big positive for Indian auto ancillary companies if this is to happen," Siddhartha Khemka, Head of Research and Wealth Management at Motilal Oswal said in a conversation with Moneycontrol. Indian auto ancillary companies that already export components to Tesla’s US operations could benefit from additional business if Tesla establishes an Indian plant. "Since these suppliers were chosen based on quality and cost competitiveness, they could continue exporting to Tesla’s global factories while also supplying the Indian market," Khemka added.