Take the pledge to vote

For a better tommorow#AajSawaroApnaKal
  • I agree to receive emails from News18

  • I promise to vote in this year's elections no matter what the odds are.
  • Please check above checkbox.

    SUBMIT

Thank you for
taking the pledge

Vote responsibly as each vote counts
and makes a diffrence

Disclaimer:

Issued in public interest by HDFC Life. HDFC Life Insurance Company Limited (Formerly HDFC Standard Life Insurance Company Limited) (“HDFC Life”). CIN: L65110MH2000PLC128245, IRDAI Reg. No. 101 . The name/letters "HDFC" in the name/logo of the company belongs to Housing Development Finance Corporation Limited ("HDFC Limited") and is used by HDFC Life under an agreement entered into with HDFC Limited. ARN EU/04/19/13618
News18 » Auto
1-min read

Icra Revises Outlook on Auto Components Sector to Negative from Stable

With global automotive outlook turning negative with a decline in sales, partly due to heightened trade tensions, export demand for Indian component manufacturers could also be impacted in the coming quarters.

PTI

Updated:September 18, 2019, 5:16 PM IST
facebookTwitterskypewhatsapp
Icra Revises Outlook on Auto Components Sector to Negative from Stable
Image for Representation (Reuters)

Rating agency Icra on Tuesday said it has revised the outlook on auto components sector to negative from stable, following a dip in sales over the past few quarters. Aftermarket demand for components, which accounts for 18 per cent of the industry turnover, has also slowed down with the decline in goods movement and the consequent weakness in freight activity, the rating agency said. Further, liquidity issues across the aftermarket dealer channel have led to de-stocking, curtailing fresh demand from component manufacturers, it added.

With global automotive outlook turning negative with a decline in sales across geographies, partly due to heightened trade tensions and other geopolitical factors, export demand for Indian component manufacturers could also be impacted in the coming quarters, Icra said. "Despite accommodative commodity prices, weakness in OEM demand will impact credit metrics for component manufacturers," Icra Senior Group Vice President Subrata Ray said in a statement. This comes amidst rapid and mandatory technological advancements in vehicle safety and emissions, which has led to sizable capital expenditure by component manufacturers over the past few years, he added.

"Most players in the auto component sector are taking a relook at their capital expenditure plans; consequently, across segments, Icra estimates a cut back ranging between 15-25 per cent by most players," Ray said. Large manufacturers, who have used their cashflows from the upcycle to develop a strong balance sheet and product capabilities, are expected to be more resilient to the current downturn, Icra said. On the other hand, entities with a leveraged balance sheet are likely to face stress, it added.

Get the best of News18 delivered to your inbox - subscribe to News18 Daybreak. Follow News18.com on Twitter, Instagram, Facebook, Telegram, TikTok and on YouTube, and stay in the know with what's happening in the world around you – in real time.

| Edited by: Chhavianshika Singh
Read full article
Next Story
Next Story

Also Watch

facebookTwitterskypewhatsapp

Live TV

Countdown To Elections Results
To Assembly Elections 2018 Results