New Delhi, Feb. 21 -- Domestic rating agency firm ICRA expects the revenue growth of the Indian auto component industry (represented by a sample of 46 auto ancillaries with aggregate annual revenues of over Rs.3,00,000 crore in FY2024, accounting for close to 50% of the industry) to ease to 7-9% in FY2025 and 8-10% in FY2026, from the highs of 14% in FY2024.

It expects operating margins to remain range-bound and hover at 11-12% in FY2025 and FY2026, supported by benefits from operating leverage, higher content per vehicle, and value addition while remaining vulnerable to any significant unfavourable movements in commodity prices and foreign exchange rates.

The disruption along the Red Sea route has resulted in a surge in ocean freight r...