Sector Rally: Auto ancillary stocks like Igarashi, Bosch and more jump 12% today; Here’s why

Synopsis: Auto-ancillary stocks surged on the back of robust December 2025 automobile sales, contributing to GST-related pricing, as well as strong post-festive demand. Estimates project 8-10 per cent growth in the OEM-related segment for FY26, with 9-11 per cent growth in the replacement segment.

Auto-ancillary stocks rallied in today’s market, drawing the attention of investors as sentiment in the automobile industry shifted to a more optimistic and positive note. The positive trends in the industry and a boost in confidence levels in a recovery in demand drew widespread buying in component manufacturers.

The advance indicates a renewed sentiment in the industry entering a phase of stable growth, with investors increasingly wagering on a best-being-yet-to-come story in the sector.

Auto-Ancillary Stocks that Surged Today.

Auto ancillary stocks experienced a stiff rally during the current trading session, going in line with optimistic demand trends in the automobile industry. Igarashi Motors (India) led the list with a gain of around 12 per cent, turning out to be the major gainer in the sector, while Bosch reported a gain of around 10 per cent due to immense buying pressure.

JBM Auto reported a gain of around 8 per cent due to optimism on OEM numbers and EV developments, while Jamna Auto Industries also reported a gain of around double 6% during intra-day trade. 

What has led the rally? 

Auto ancillary stocks strengthened as the surprise positivity in sales data in December 2025 in the automobiles sector boosted the conviction of a sustained recovery in demand.

Analysts have ascribed the healthy sales on the OEM side to the successive cuts in the GST rates, leading to a reduction in the prices of vehicles, thereby encouraging purchases in the entry-level two-wheeler as well as the passenger vehicle segment. 

The robust wholesale and rake-in in the aftermarket even after the festive period has led to a lean closing of inventories by the OEMs in CY2025, thereby enhancing the clarity on the production and component demand in Q4 of FY26, as discussed by Motilal Oswal.

Adding to the positives is also the improving medium-term growth outlook for auto ancillaries. According to ICRA, domestic OEM-selling revenues for auto ancillaries are likely to register an increase of 8-10% in FY26, and the replacement segment is also likely to register a growth of 9-11% on account of an increasing vehicle parc, older vehicle population, second-hand vehicle purchases, preventive maintenance activity, and growth in the organised spares sector. Another boost for the sector came in the form of GST normalisation.

Stock-specific and structural factors further supported the rally. Bosch’s management highlighted that while global conditions remain volatile, India’s auto demand remains resilient, with growth increasingly driven by features, comfort, and safety, driving up per-vehicle component content. 

CARE Ratings also pointed to Jamna Auto Industries’ dominant 62–65% market share in M&HCV leaf springs, supplemented by strong relationships with major OEMs, which underpins expectations of sustained revenue growth for the company. Put together, strong near-term sales data and favourable FY26 visibility drove sharp gains across auto-ancillary stocks.

General Outlook.

The future looks promising for the auto-ancillary industry, aided by improving demand conditions in the car sector and greater clarity on production numbers. The industry has witnessed good sales dynamics, low inventory, and stable policies, which has helped build a positive sentiment for a sustained revival.

The industry has been aided by fundamental drivers such as increased use of vehicles, increasing focus on safety and functionality, and a strong association with carmakers despite global macro uncertainties.

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