Auto component players eye ₹10,000 crore lightweighting opportunity by FY31 as CAFE norms tighten: Equirus

Indian auto component makers could tap a ₹9,000-10,000 crore addressable market in lightweighting products by FY31, as tighter fuel-efficiency norms, higher content per vehicle and growing exports open up new avenues for growth, according to Equirus Securities.

The brokerage’s assessment, based on discussions at the Equirus India Growth Summit 2026, points to increasing opportunities across lightweighting, automotive lighting, heavy forgings, driveline components and exports. The shift is being supported by rising technology content in vehicles and OEM efforts to improve efficiency.

Lightweighting gains momentum

Products including control arms, links, torsion beams and subframes are expected to form a ₹9,000-10,000 crore market by FY31. Sharda Motor Industries is targeting about 15% of this opportunity and expects revenue from the segment to rise to ₹1,400-1,500 crore from around ₹300 crore currently.

The implementation of tighter CAFE 3 fuel-efficiency norms is expected to encourage automakers to increase lightweighting, providing a structural growth driver. Sharda Motor’s partnership with Donghee is aimed at strengthening engineering capabilities and developing lightweight products such as subframes and torsion beams.

Lighting, forgings add to growth runway

Automotive lighting is another high-growth opportunity. Lumax Industries expects revenue to grow around 20% in FY27 and more than 20% in FY28, while targeting a 15-20% CAGR through FY31. Its revenue could reach nearly ₹9,000 crore by FY31, supported by an order book of about ₹2,500 crore, nearly 90% of which comprises LED lighting.

Average passenger-vehicle content for Lumax is currently ₹15,000-20,000 per vehicle and is expected to rise 40-50% over the next two years as higher-value lighting technologies gain adoption.

In heavy forgings, Happy Forgings sees potential revenue of around ₹2,000 crore within three years of commercial production, expected in FY29. The company has invested ₹500 crore and plans another ₹1,000 crore based on orders.

Exports emerge as a second growth engine

Transmission and driveline components also offer significant headroom. Divgi TorqTransfer Systems estimates India’s AWD/4WD penetration at below 5%, against around 40% in the US. It is targeting 50,000 units in the rear-wheel-drive SUV and pickup automatic-transmission market, translating into potential revenue of about ₹500 crore.

Exports are gaining importance across suppliers. Divgi expects exports and international operations to eventually contribute 30-40% of revenue, while Kross is targeting a rise in export contribution from 4.5% currently to around 10% over two to three years.

However, tyre makers face near-term cost pressures, with natural rubber prices at a two-year high. Equirus expects raw-material costs to rise 8-10% sequentially in Q2, while CEAT has already implemented multiple price increases to offset the impact.