Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs) have significantly increased their stakes in auto-component companies during the April-June 2026 quarter. According to reports from The Financial Express, both institutional categories bought two auto-component stocks, increasing their combined stake by 8% during this period. This aggressive buying pattern comes as India's auto ancillary industry enters its next growth phase, supported by the government's automobile and automobile-component PLI scheme.
NRB Bearings Ltd. has emerged as a leading manufacturer of needle roller bearings since 1965, with nearly 90% of vehicles on Indian roads using its bearings. As reported by The Financial Express, during Q1FY27, FIIs increased their stake by 4.23 percentage points to reach 18.9%, while DIIs raised their holding by 3.79 percentage points to 13.85%. The company's revenue grew 19.2% YoY to ₹370 crore in Q1FY27, with profit after tax increasing 15% YoY to ₹38 crore. NRB is diversifying into higher-value automotive applications, electrification, robotics, and industrial segments, maintaining an EV-agnostic approach across ICE, EVs, and hybrid models. The company has secured its first aerospace and defence bearings orders for a mission-critical Sukhoi-30 application and launched next-generation hybrid platforms for BMW, with applications under development for Mercedes-Benz and its electric models.
Craftsman Automation Ltd. operates across three main business verticals - powertrain, aluminium products, and industrial engineering. According to The Financial Express, FIIs increased their stake by 2.09 percentage points to 17.28% while DIIs raised their holding by 4.61 percentage points to 32.9% during Q1FY27. The company is undertaking a massive ₹1,500 crore capital expenditure cycle, including a new facility at Hosur for high-pressure die-casting manufacturing. Revenue jumped 36% YoY to ₹2,432 crore in Q1FY27, with profit after tax surging 116% YoY to ₹151 crore. The company has secured significant orders in the heavy-horsepower engines segment, with cumulative order value from the first four orders crossing the $100 million revenue target by FY30. Management expects the Kothavadi Project to generate over $100 million in revenue by FY29.
The government's automobile and automobile-component PLI scheme has attracted substantial investments, with ₹44,326 crore invested by the end of March 2026, surpassing the target of ₹42,500 crore by March 2027. As reported by The Financial Express, this strong institutional interest reflects the auto ancillary industry's entry into its next growth phase. Both NRB Bearings and Craftsman Automation are expanding beyond traditional businesses, with NRB targeting industrial, aerospace and defence applications while Craftsman scales aluminium and powertrain segments through fresh capacity additions. The aluminium segment has been rapidly growing and receiving new orders for both two- and four-wheelers, with the existing facility already running at over 85% capacity.
Despite strong fundamentals, both companies are trading at premium valuations that may limit near-term upside potential. According to The Financial Express, NRB Bearings trades at a PE of 31.4x versus the industry median of 29.7x, while Craftsman Automation trades at a PE of 60.8x against the industry median of 30.4x. The PEG ratio for NRB stands at 2.4x compared to the industry median of 0.96x, indicating relative overvaluation even when adjusted for growth prospects. Craftsman Automation's ROCE stands at 13.9%, slightly below the industry median of 16%, while the dividend yield is around 0.11%, below the industry median of 0.3%. Execution of new orders, timely completion of capacity addition projects, and successful diversification plans will be crucial for sustained revenue growth and stronger returns in the coming years.
