Indian Auto Component Lightweighting Market May Reach ₹10,000 Crore By FY31

Indian Auto Component Lightweighting Market Could Reach ₹10,000 Crore

Indian auto component makers could address a ₹9,000-10,000 crore lightweighting market by FY31, according to Equirus Securities, as tighter fuel-efficiency requirements, rising vehicle content and stronger exports create new opportunities. The opportunity, highlighted in Equirus Securities’ takeaways from the Equirus India Growth Summit 2026, includes products such as control arms, links, torsion beams and subframes. Tighter CAFE 3 fuel-efficiency requirements are expected to increase OEM focus on reducing vehicle weight, creating additional demand for lightweight component technologies. Sharda Motor Industries is targeting around 15 percent of this market and expects lightweighting revenue to rise substantially from its current base.

Sharda Motor Targets Lightweighting Expansion

Sharda Motor Industries is positioning itself for a larger share of the lightweighting opportunity through technology development, localisation and engineering capabilities. The company has partnered with Donghee to strengthen its design and engineering capabilities and pursue products including subframes and torsion beams. The partnership involves technology transfer and localisation, supporting the company’s objective of expanding its product portfolio. Sharda Motor is targeting approximately 15 percent of the broader ₹9,000-10,000 crore market, which could support revenue of ₹1,400-1,500 crore compared with around ₹300 crore currently.

Exports And New Segments Add Growth Opportunities

Sharda Motor Industries has also secured export orders worth around ₹120 crore annually, with peak revenue contribution expected by FY29. Alongside lightweighting, the company is evaluating an independent entry into the medium and heavy commercial vehicle segment and has entered the premium two-wheeler emissions segment. Sharda estimates the latter opportunity at ₹150-200 crore. These initiatives broaden the company’s potential growth beyond its existing operations, while the combination of export programmes, localisation and new product categories could increase its addressable market over the medium term.

Automotive Lighting Content Continues To Rise

Lumax Industries is another component supplier identified by Equirus Securities as having significant growth potential. The company expects revenue growth of around 20 percent in FY27 and more than 20 percent in FY28, while targeting a 15-20 percent CAGR through FY31. Revenue is expected to reach approximately ₹9,000 crore by FY31, supported by an order book of around ₹2,500 crore. Nearly 90 percent of the order book comprises LED lighting, while approximately ₹1,500 crore, equivalent to 60 percent, is expected to enter production by FY28.

Higher-Value Lighting Raises Vehicle Content

Lumax Industries currently has average passenger-vehicle content of approximately ₹15,000-20,000 per vehicle. The company expects this content to increase by 40-50 percent over the next two years as vehicle manufacturers adopt newer and higher-value lighting technologies. The increase reflects the growing contribution of advanced lighting systems to overall vehicle value rather than simply higher production volumes. The trend provides component suppliers with an opportunity to increase revenue per vehicle as OEMs introduce more sophisticated lighting solutions and expand the content of electronic and technology-enabled features.

Heavy Forgings Programme Targets New Revenue Pool

Happy Forgings expects its heavy forgings programme to generate potential revenue of around ₹2,000 crore within three years of commercial production, which is expected to begin in FY29. The company has already invested around ₹500 crore and plans a further ₹1,000 crore investment depending on orders received. It has secured data-centre-related orders from Cummins and Caterpillar, with realisations of approximately ₹800-1,000 per kg. Happy Forgings expects gross margins of around 65 percent for forged crankshafts and 80 percent for machined crankshafts.

Passenger Vehicle And Industrial Applications Expand Mix

Happy Forgings expects passenger vehicles to contribute approximately 12-15 percent of revenue over the next three to four years, while industrial applications are expected to account for around 35-40 percent. The expected change in revenue mix reflects the company’s effort to broaden its exposure beyond traditional applications and participate in higher-value forging opportunities. Its heavy forgings investment, combined with secured orders and planned additional capital expenditure, is intended to create a new growth platform. The programme therefore represents both capacity expansion and diversification across automotive and industrial applications.

Divgi Targets AWD And Automatic Transmission Opportunity

Divgi Torqtransfer Systems sees scope for higher adoption of all-wheel-drive and four-wheel-drive systems in India. According to Equirus Securities, penetration is currently below 5 percent in India compared with around 40 percent in the US. Divgi estimates an addressable market of approximately 150,000 units for automatic transmissions used in rear-wheel-drive SUVs and pickup trucks. The company is targeting 50,000 units, which could translate into around ₹500 crore of revenue. Capturing this opportunity would require additional capex of ₹100-200 crore, with production expected to begin in the second half of calendar 2028.

Exports Could Become A Larger Revenue Contributor

Exports are also expected to become increasingly important for Divgi Torqtransfer Systems. The company is targeting component exports of around ₹80 crore in FY27, compared with ₹23 crore in Q1FY27. Over time, exports and international operations are expected to contribute approximately 30-40 percent of revenue. This international expansion provides an additional growth avenue alongside the domestic opportunity in all-wheel-drive, four-wheel-drive and automatic transmission systems. The combination of higher domestic penetration and a larger export contribution could therefore support broader revenue diversification as the company expands its production capabilities.

Kross And Uniparts India Focus On Export And Industrial Growth

Kross is targeting revenue of around ₹850 crore in FY27, supported by demand from trailer and tractor applications, new products and capacity expansion. The company has commissioned an axle-beam extrusion plant, with commercial production scheduled to begin in August 2026. Kross expects to become the first company in India to use the extrusion process for trailer axle beams and plans to charge a 2-3 percent premium for the product. Exports currently account for around 4.5 percent of revenue, with the company targeting approximately 10 percent over the next two to three years and export EBITDA margins of around 18 percent.

Uniparts India expects FY27 growth to be a few percentage points above the 21 percent achieved in FY26, with construction equipment remaining a key growth driver. Construction equipment currently contributes around 45 percent of revenue. The company has a new-business order book of more than ₹225 crore, with approximately 35 percent linked to large agriculture products and another 35 percent to construction equipment. This order pipeline provides visibility into further diversification across industrial and off-highway applications, while the broader component sector continues to benefit from capacity additions, new products, localisation and increasing export opportunities.

Higher Rubber Costs Create Near-Term Pressure For Tyre Makers

CEAT is facing higher input and freight costs as natural rubber prices reach a two-year high, according to Equirus Securities. Raw-material costs are expected to increase by approximately 8-10 percent sequentially in Q2, creating pressure on tyre manufacturers. CEAT implemented a 4-5 percent price increase in July and planned another 2-3 percent increase in August. The company had cumulatively raised replacement-market prices by around 10 percent through July and implemented approximately a 10 percent price increase for OEMs in Q2. These actions indicate continued efforts to offset higher input costs.

Freight Costs Add Pressure To International Operations

Higher freight costs are also affecting CEAT’s international business, with freight rates increasing by around two to three times and customers deferring deliveries, according to Equirus Securities. The combination of elevated natural rubber prices, higher raw-material costs and increased logistics expenses creates a challenging near-term operating environment for tyre manufacturers. While price increases can partially offset cost inflation, delayed customer deliveries and higher international freight rates can affect volumes and margins. The developments therefore contrast with the broader growth opportunities identified across lightweighting, lighting, forgings, driveline systems and component exports.

Auto Component Sector Sees Multiple Growth Drivers

The Equirus India Growth Summit 2026 takeaways point to several structural opportunities across the Indian auto component sector. Lightweighting is emerging as a major opportunity as CAFE 3 requirements increase OEM focus on vehicle efficiency, while higher vehicle content is supporting growth in automotive lighting and advanced components. At the same time, new investments in heavy forgings, automatic transmissions and axle-beam manufacturing are expanding the addressable market for domestic suppliers. Export programmes are providing another growth lever, although rising input and freight costs remain important risks for companies exposed to tyres and international logistics.

Frequently Asked Questions

What is the estimated Indian auto component lightweighting market by FY31?
The Indian auto component lightweighting market could reach ₹9,000-10,000 crore by FY31, according to Equirus Securities’ takeaways from the Equirus India Growth Summit 2026. The opportunity includes products such as control arms, links, torsion beams and subframes, with tighter CAFE 3 fuel-efficiency requirements expected to encourage OEMs to focus more strongly on vehicle weight reduction. Sharda Motor Industries is targeting around 15 percent of this opportunity and expects its lightweighting business to generate ₹1,400-1,500 crore in revenue.

Which component companies are targeting major growth opportunities?
Several Indian component suppliers are pursuing significant expansion opportunities across different automotive and industrial segments. Sharda Motor Industries is targeting lightweighting, exports and new vehicle segments, while Lumax Industries expects higher lighting content per passenger vehicle. Happy Forgings is expanding into heavy forgings, Divgi Torqtransfer Systems is targeting AWD and automatic transmission opportunities, and Kross is expanding axle-beam manufacturing and exports. Uniparts India is also targeting growth through construction equipment and agriculture-related orders, highlighting broad diversification across the component industry.