Auto Ancillary Stocks Back in Focus After Goldman Sachs’ Fresh Ratings

Key Takeaways

• Goldman Sachs initiated coverage on four Indian auto ancillary stocks on July 20, 2026: Buy on Sansera Engineering and Craftsman Automation, Neutral on Bharat Forge and Samvardhana Motherson
• Sansera Engineering carries the highest target at Rs 4,130 (up to 28% upside); shares rose 3.96% intraday to Rs 3,346.10 on the NSE
• Craftsman Automation’s Rs 11,600 target implies ~27.4% upside from its Rs 9,105 close on July 19
• Bharat Forge’s Rs 2,120 target sits ~3.1% below current levels; Samvardhana Motherson’s Rs 148 target is roughly in line with its current Rs 143–144 range
• Goldman Sachs projects sector EBITDA growth of 7% in FY27E, 26% in FY28E and 14% in FY29E on a shift toward aerospace, defence and semiconductor work

Goldman Sachs initiated coverage on four Indian auto ancillary manufacturers on July 20, 2026, turning bullish on Sansera Engineering and Craftsman Automation while staying Neutral on Bharat Forge and Samvardhana Motherson. The brokerage’s thesis centres on a structural shift among these companies away from cyclical auto-parts manufacturing toward precision engineering work in aerospace, defence, semiconductors and electric vehicles, a shift it believes the market has not fully priced in. Sansera Engineering shares reacted immediately, rising as much as 3.96% intraday to Rs 3,346.10 on the NSE against a previous close of Rs 3,218.81.

Sansera Engineering, Craftsman Automation Get Buy Calls

Goldman Sachs set a target price of Rs 4,130 on Sansera Engineering, implying an upside of up to 28%, citing the company’s expansion into aerospace, defence and semiconductor (ADS) manufacturing.

The brokerage flagged Sansera’s fit as a precision-engineering supplier to semiconductor wafer fabrication equipment makers, along with the emerging Southeast Asian supply chain in that space, as margin drivers.

Production-linked incentive benefits are not yet built into its estimates, Goldman Sachs said, calling this an additional source of upside, alongside domestic two-wheeler parts outsourcing.

Sansera’s own Q4 FY26 investor presentation confirms the ADS segment grew 155% year-on-year to Rs 315.5 crore in FY26, with management guiding for Rs 550–600 crore in FY27; the segment’s unexecuted order backlog stood at Rs 4,463.8 crore as of March 2026.

Separately, NiftyTrader’s stock tracker shows Sansera Engineering carries a Stock Score of 7 out of 10, with coverage from 10 analysts tracking the counter.

Craftsman Automation received a target price of Rs 11,600, an implied upside of about 27.4% from its Rs 9,105 close on July 19. Goldman Sachs said the company’s engine block business is positioned to benefit from the global data centre build-out, while rising aluminium content per vehicle under the EV transition and a “local for global” engine parts opportunity add further growth levers. The brokerage also expects the ongoing turnaround at group company Sunbeam to support profitability and return on equity.

Bharat Forge, Motherson Stay In The Neutral Zone

Goldman Sachs initiated Bharat Forge with a Neutral rating and a target price of Rs 2,120, roughly 3.1% below the stock’s early trade of Rs 2,184–2,190 on July 20.

The brokerage said an expected commercial vehicle upcycle in North America and Europe over the next two years, along with a threefold rise in defence revenue to 22% of consolidated sales, is largely reflected in the current price.

It flagged that Bharat Forge’s overseas manufacturing units in Europe and the US continue to struggle and are being wound down. Samvardhana Motherson was initiated with a Neutral rating and a target price of Rs 148; the stock last traded around Rs 143–144 on the NSE, keeping the target within a narrow band of the current price rather than signalling meaningful downside.

Track how foreign and domestic institutions are positioning across auto stocks this week on NiftyTrader’s FII-DII Tracker: https://www.niftytrader.in/fii-dii-data

Auto Ancillary Sector: FY26 Scorecard, FY27 Outlook

Indian auto ancillary companies grew revenue 12.5% year-on-year in FY26, according to Elara Capital, with aggregate EBITDA up 13.3% and operating margin steady at 13.6%.

Suspension and braking companies led revenue growth at 16%, followed by multiproduct companies at 15%. Tyres, lighting and suspension segments posted the sharpest EBITDA growth at 17%, while forgings and batteries saw EBITDA decline 4% and 1%, respectively.

Goldman Sachs projects sector-wide revenue growth of 7% in FY27E, 12% in FY28E and 10% in FY29E, with EBITDA growth of 7%, 26% and 14% over the same years.

For FY27, Elara Capital expects passenger vehicle volumes to grow 7% and two-wheeler volumes to rise 8%, with product, segment, geographic and inorganic expansion cited as the four levers that can help ancillary makers outperform OEMs.

NiftyTrader Desk View

Source: Goldman Sachs research note (via Economic Times); Sansera Engineering Q4 FY26 Investor Presentation; NiftyTrader Analyst Tracker; Elara Capital

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Bottom Line

Goldman Sachs’ initiation puts the spotlight on which auto ancillary makers are moving beyond cyclical auto parts into aerospace, defence, semiconductor and EV-linked work, with Sansera Engineering and Craftsman Automation seen as the bigger beneficiaries, while Bharat Forge and Samvardhana Motherson’s re-rating already looks priced in by the brokerage’s own account.

This article is based on brokerage research and third-party commentary and is intended for informational purposes only. It does not constitute investment advice. Please consult a SEBI-registered investment advisor before making investment decisions. Investments in securities are subject to market risk.