sunrise Sector

The sleeping sector has become active all of sudden with Minda expanding capacities 5 times in next 3 years with an expected investment of Rs 1000 crs, we think auto ancillary sector has become a next sun rise sector. Today Birla too announced Rs 90 crs expansion. Earlier Mahindra's made strategic acquisitions and now TATA, MARUTI and BAJAJ are looking for opportunities for acquisitions.

Gates USA too decided to raise borrowings in S S Duncan. All forging and casting companies are facing huge capacity shortage due to increased demand from auto makers.

Mergers and acquisitions have become order of the day.

It clearly suggest that investors should take risk on this most battered and ignored sector where ROI will be very huge. In fact, since the scenario has turned in favour of domestic consumption this sector is insulated from USD fall as major consumption is now roaring from local manufacturing of even foreign car makers.

Our top picks in this sector are Minda, S S Duncan, Aditya Froging, Rajendra Mechanicals, JBM Auto KIC Metalics, Carnation Industries, Bosch Chasis, Fairfield Atlas, Anil Special Steel and Jaiparabolic Springs. The surprise pick is ANG Auto which is now under our coverage.