Auto ancillary companies: AA 125 (3 to 91,225): A set of stocks from which multibaggers & IBC cases may emerge in the next 2 to 5 years

Synopsis

Thinking about the odd headline? Before we explain it, let us introduce this report, the opening installment of a research-based analytical series that will, every Sunday, take you on a deep dive into auto ancillary companies that are well prepared to handle the EV transformation, or are preparing to do so. Also, the ones that are likely to go under as they are just not relevant in the EV age. Back to the headline: AA stands for auto ancillary, 125 is the number of listed auto ancillary companies, 3 to 91,225 stands for Rs. 3 crore to Rs. 91, 225 crore (the smallest to biggest market cap in the industry). Now, why the AA sector may throw up both multibaggers and insolvency cases is simple. The whole auto industry is going through a fundamental shift. A shift which will make several components irrelevant and hence is an existential threat for some companies. But those who anticipated the transition will benefit exponentially. And this transformation will get leg up when Tesla comes to India not only as a seller of its car (which will happen sooner than later) but when it sets up its plant and a new auto ancillary ecosystem gets built.

Few will admit it, but most investors come to the stock market to make big gains in a short period of time. Which is why, whatever the market condition, everyone is on the lookout for the next multibagger. Find one, and see a multiplier effect on your wealth. The problem, however, is that it is not easy to find a multibagger stock. For multiple reasons. There are certain conditions that need to be met before you can zero in on a set of stocks

ETMarkets.com

Apr 19, 2025, 08:33:00 PM IST

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